of 
(California 


A  Syllabus 
For  an  Elementary  Course 


in 


Economics 


BY  F.  R.  CLOW 


A  SYLLABUS 

FOR  AN  ELEMENTARY  COURSE 


IN 


ECONOMICS 


BY  F.  R.   CLOW 

State  Normal  School,  Oshkosh,  Wis. 


THIRD  EDITION 
PRICE  15  CENTS 


Oshkosh,  Wis. 

The  Castle-Pierce  Printing  Company 
1908 


8PREGKE13 


To  the  Student: 

It  is  our  practice  in  this  school  to  have  at  least  one  good  text- 
book in  the  hands  of  the  class,  and  to  require  all  to  study  it  thor- 
oughly. The  outline  which  follows  is  designed  to  hold  attention  to 
the  most  fundamental  points  in  elementary  economic  theory,  and  to 
be  used  to  this  end  both  by  the  students  in  their  study  and  the 
teacher  in  directing  discussion  in  the  class-room.  The  references  are 
to  facilitate  the  use  of  collateral  reading.  A  limited  use  of  them,  helps 
to  bring  out-the  thought  by  dissociating  it  from  any  special  form  of 
words;  but  there  would  rarely  be  any  advantage  to  a  beginner  in 
reading  more  than  three  or  four  references  on  a  topic;  the  aim  of 
the  numerous  references  is  to  distribute  the  demand  which  a  large 
class  makes  on  the  library. 

The  problems  and  exercises  are  designed  for  a  function  similar 
to  that  of  problems  in  mathematics,  logic,  or  philosophy,  laboratory 
work  in  the  natural  sciences,  field  work  in  geology,  clinics  in  medi- 
cine,, shop  work  in  engineering,  and  observation- and  practice  teaching 
in  pedagogy.  The  written  work  on  the  exercises,  and  all  notes  on 
reading,  lectures,  and  class-room  discussions,  should  be  on  a  uniform 
style  of  paper,  and  sufficient  margin  should  be  left  for  binding.  On 
the  completon  of  the  study,  these  papers,  together  with  this  syllabus, 
should  be  fa^stenedl^e^nrelyt  fetgefitey}  tdnd  covered.  To  a  careful  stu- 
dent these  papers  ^mll^he^Qf  cmore  <vafaief'fhan  many  volumes. 


CONTENTS 


I.  Introduction. 

II.  Production. 

III.  Money  and  Credit;  the  Medium  of  Exchange. 

IV.  Commerce;  the  Process  of  Exchange. 

V.  Value;  the  Basis  of  Exchange. 

VI.  Distribution. 


218550 


WORKS  REFERRED  TO  BY  SHORT  TITLES 

A Andrews:    Institutes   of   Economics.     Silver,   Burdett   &   Co. 

A.   S Adam  Smith:    Wealth  of  Nations.    Ashley's  Edition.    Macmillan. 

B Bullock:     Introduction  to  Study  of  Economics.     Silver,   Burdett  &  Co. 

Census Abstract  of  the  Twelfth  Census.    Bureau  of  the  Census. 

Clark Essentials  of  Economic  Theory.     Macmillan. 

Clow Introduction  to   the   Study  of   Commerce.     Silver,   Burdett   &   Co. 

E Ely:     Outlines  of  Economics.     Flood  &  Vincent. 

E.  &  W .Ely  &  Wicker:    Elementary  Principles  of  Economics.    Macmillan. 

F Fetter:     Introduction  to  Economics. 

G Gide:     Principles   of  Political   Economy.     Heath   &    Co. 

H Hadley:     Economics.     Putnam. 

L Laughlin:     Elements  of  Political   Economy.    Am.   Book   Co. 

L.   M Laughlin's   Edition   of  Mill.     Appleton. 

M J.    S.    Mill:     Principles   of   Political   Economy.     Macmillan. 

Mar Marshall :     Economics  of  Industry.     Macmillan. 

N Newcomb:     Principles   of    Political    Economy.     Harper. 

Nich Nicholson:     Principles  of  Political  Economy.     Macmillan. 

R —  Ricardo:    Political  Economy  and  Taxation.    Ashley's  Edition.     Macmillan. 

Readings Bullock:     Selected   Readings  in   Economics.     Ginn   &   Co. 

Seager Introduction  to  Economics.    Henry  Holt  &  Co. 

Seligman Principles  of  Economics.    Longmans. 

Sta.  Abs Statistical  Abstract  of  the  United  States  for  1906.     Bureau  of  Statastics. 

W.  .  ...F.   A.   Walker:     Political  Economy.     Briefer   Course.     Holt   &   Co. 


PARALLEL  REFERENCES 


ADAM    SMITH 

Pages  in 

Ashley's  Edition        Book 
5-15  I 

24-8  I 

34 

54-83 

86-96 
100-4 
119 
151 
160-2 


219 

251-85 


I 
I 
I 
I 
I 

II 
II 
IV 
V 


Chapter      Part 


RICARDO 


Ashley's  Edition 
Pages 

3 

3 

75-9 
80-1 
82-3 


Conner's  Edition 

Pages 

5 

9 

65-9 
70-1 
72-3 


BULLOCK 

References  are  for  the  first  edition. 
For  the  second  edition,  add  eight  pages 
after  p.  210. 

For  the  third  edition,  add 

Six  pages  after  p.  142. 

Fourteen  pages  after  p.  210. 

Forty-four  pages  after  p.  329. 


ECONOMICS 


PART  I.     INTRODUCTION. 

1.  Human  Wants. 

a.  Various  classifications  of  human  wants.    How  are  wants  classified 

on  the  basis  of  order  of  development  ? 

b.  Connection  between  existence  wants  and  culture  wants. 

c.  Which  of  these  wants  can  be  satisfied  by  the  expenditure  of  money? 

What  proportion  of  the  thought  and  effort  of  the  human  race  is 
-  given  to  the  satisfaction  of  these  money-wants? 

B.,  79-84;  A.,  2,  3,  28,  29;  Readings,  238-46;  Clow,  1-4;  Mar.,  1-4;  E.,  72-9;  N., 
3-7;  F.,  9-14;  Seligman,  3,  4. 

2.  Wealth. 

a.  Definition.   Does  it  include  water,  fish  in  the  sea,  a  bottle  of  whisky, 

a  strong  arm,  labor? 

b.  Other  terms :    Services,  goods,  commodities,  utilities,  riches. 

c.  Qualities  of  material  wealth. 

(1)  Transferability :    It  must  be  exchangeable. 

(2)  Utility:    It  must  be  something  people  want. 

(3)  It  must  either  be  scarce  or  require  labor  to  secure  it. 

d.  Distinguish  wealth  from  titles  to  wealth.    Are  deeds,  stocks,  bonds 

and  notes  part  of  the  wealth  of  the  community? 

e.  Social  vs.   individual  wealth.    When  property  is   in  one  place  and 

its  owner  in  another,  in  which  place  should  it  be  counted? 

B.,  84-7;  Clow,  3-5;  W.,  8-13;  L.,  5,  6,  59-61;  E.  &  W.,  80-5;  E.,  91-5,  146;  M.,  I, 
25-26;  L.  M.,  50;  A.,  1-4;  R.,  2;  N.,  48;  Mar.,  51-4;  G.,  38-43,  54-60;  Nich.,  I,  5-7, 
23-9;  F.,  15-20;  Seager,  48,  49;  Seligman,  8-22. 

3.  May  there  be  too  much  WTealth? 

a.  Does  destruction  by  wars  or  fires  produce  benefit  ? 

b.  Are"  labor-saving  inventions  beneficial?    Importations?    Production 

by  convicts,  women  or    others  who  might  be  supported    without 
work  ? 
B.,  101-7;  W.,  291-9;  L.,  1C6-7;   X.,  420-4;   G.,  341-4;  E.,  96;   F.,  351-2. 

4.  Political  Economy  or  Economics. 

a.  Derivation  of  terms. 

b.  Definitions.    Is  economics  a  science?    What  is  science? 

c.  Does  economics  include  a  consideration  of  what  ought  to  be?    Does 

it  include  industrial  history? 

B.,  79;  M.,  I,  17;  L.  M.,  47;  L.,  4,  5,  261;  A.,  1;  W.,  7,  8;  N.,  21,  39;  Mar.,  44-8; 
G.,  1-3;  E.,  76-83;  F.,  3-8;  Seager,  1-2;  Seligman,  6-8;  Clark,  1-4,  57-8;  Ward, 
Outlines  of  Sociology,  162-3. 


6  Economics 

PART  II.     PRODUCTION. 

1.  Introduction. 

a.  What  is  the  problem  in  this  Part? 

b.  What  is  production?   What  common  result  is  there  in  making  chairs 

and  raising  wheat? 

c.  The  three  agents  in  production.  Can  any  two  of  them  produce  wealth 

without  the  third? 

B.,  115-20;    E.   &  W.,   113-21;   W.,   21-2;   A.,  34-9;    L.,   13-15;    N.,   57,  70-2;    Mar.,  57; 
E.,  89,  90;  M.,  I,  45-9;  L.  M.,  53,  58;  G.,  93-5;  Seager,  107-8;  Seligman,  275-84. 

EXERCISES. 

1.  Prepare  a  table  showing  (a)  the  total  wealth  of  the  United  States,  (b)  the  wealth 
of  the  five  states  having  the  greatest  amount,  and   (c)   the  wealth  of  the  five  having  the 
least.    Sta.  Abs.,  80,  81. 

2.  Prepare  a  table  showing  (a)   the  five  states  which  rank  highest  in  total  amount 
of  agricultural  and  manufactured  products,  with  the  amount  for  each  state,    (b)   the  five 
states,    excluding  territories  and  the   District   of   Columbia,   which  rank  lowest.     Census, 
383-4. 

3.  Write  a  paper  in  good   literary  form   on  the   amount  of  wealth   in  existence  as 
compared  with  the  annual  production,     (a)  State  what  you  intend  to  show  in  the  paper, 
(b)  Find   what   proportion   the   value    of   farm    products    bears    to    the   value   of   all   farm 
property.    Sta.  Abs.,  674.     (c)  Manufactured  products,  to  manufacturing  machinery,  tools', 
and  implements.     Sta.   Abs.,  78,   678.     (c)     Suppose  the   country   should  be   devastated   in 
some   way   that   would   leave   its   productive   power   unimpaired.     Estimate    the   length    of 
time  required  to  restore  the  loss. 

N.  B.  Good  literary  form  means  to  observe  all  the-  directions  given  in  composi- 
tion and  rhetoric.  Give  no  tables,  and  use  few  figures.  Select  the  two  or  three  most 
striking  facts  which  the  statistical  table  tells,  and  express  each  one  in  well-chosen  words. 
Express  quantities  chiefly  by  comparison;  in  no  other  way  do  big  numbers  have  any 
meaning  whatever.  A  graphic  representation  of  a  statistical  table,  however,  by  means 
of  a  chart  of  some  kind,  is  always  acceptable.  All  written  work  should  state  precisely 
the  source  of  information.  In  a  long  paper  the  references  should  be  placed  along  the 
margins. 

2.  Classification  of  Industries. 

a.  Extractive:    agriculture,  mining,  lumbering,  fishing,  grazing. 

b.  Transforming  or  manufacturing :    wood,  iron,  textiles,  foods,  etc. 

c.  Transportation     and    communication :      railroads,     canals,     express, 

telegraph,  telephone,  post-office. 

d.  Financial :    commerce,  banking,  promoting. 

c.     Protective:    insurance,  government,  police  and  justice,  detectives. 
f.     Personal  services :    the  professions,  domestic  servants,  etc. 
B.,  32-76;   Seager,  155-7;   Census,   quarto  volumes. 


Production  '    7 


3.     Labor. 


a.  Make  a  logical  division  of  human  exertion. 

b.  Find  several  definitions  of  labor. 

c.  Amount  of  labor  depends  on — 

(1)  The  number  of  laborers. 

(2)  Their  individual  efficiency. 

Where  would  you  classify  musicians,  lawyers,  policemen,  draymen,  railway  officers 
and  hands,  salesmen,  base-ball  players? 

Is  the  exertion  of  the  slave  labor?    The  horse?    The   steam   engine? 

B.,  121-30;  E.  &  W.,  129-34;  W.,  33-42;  E.,  100-3;  L.,  27-33;  A.,  43-4,  57-61;  N.,  48, 
103-8;  A.  S.,  160-2;  Mar.,  123-37;  M.,  I,  75-9;  G.,  111-6;  H.,  121-6;  Nich.,  I,  78-86; 
F.,  173-201;  Seager,  120-125;  Seligman,  285-90;  Clark,  9-15;  Readings,  255-86. 

EXERCISES. 

1.  Write  a   paper   on   the   increase   in   the    population     of    the   United    States,     (a) 
Increase  in  total  population.    Census,  32,  33;  Sta.  Abs.,  22,  650.     (b)    Per  cent  of  increase 
in  a  decade.    Census,  35,  36.      (c)    How  have  the  various  sections  of  the  country  shared 
in  this  increase?    During  which  period  did  each  section  grow  the  most  rapidly?    Census, 
32-36;   Sta.   Abs.,  26,  27,  44-6.      (d)     If  the  population   should  continue  to  increase  at  the 
rate  of  twenty  per  cent  each  decade,  what  would  it  be  in  a  century?    In  a  thousand  years? 
The  answer   to   this   last   question   can   be   readily   found   by  the   use   of   logarithms,     (e) 
Estimate  the  rate  of  natural  increase  by  excluding  the  immigration.    Sta.  Abs.,  691,  62. 

2.  Write  a  paper  on  immigration,      (a)     Fluctuation  in  the  number  of  immigrants. 
Sta.  Abs.,  691.     (b)    What  proportion  of  our  people  are  foreign-born?    Native,  but  having 
both   parents   foreign-born?     Native,   but   having  one   parent   foreign-born?     Census,   44-6. 
(c)     What    proportions    have    the    various    foreign    countries    contributed    to    our    foreign 
population?     Census,    58-63;    Sta.    Abs.,    49-59.     Observe    only    the    totals    for    the    United 
States,     (d)    In  what  states  or  cities  is  each  nationality  found  in  the  largest  proportion? 
Census,  58-63,  103-8;  Sta.  Abs.,  47-54.    Select  one  or  a  few  out  of  the  twenty  nationalities. 

3.  Analyze  the  population  of  some  city.    Census,  100-108. 

4.  Let  each  student  take  one  of  the  following  pairs  of  states  for  comparison: 

Iowa,  Georgia.  Alabama,  Minnesota. 

Rhode  Island,  Oregon.  Wisconsin,  Kentucky. 

North  Dakota,  Vermont.  Connecticut,    Mississippi. 

New  Jersey,  Tennessee.  Massachusetts,  South  Carolina. 

New  York,  Pennsylvania.  Ohio,  Louisiana. 

(a)  Find  the  combined  production  of  agricultural  and  manufactured  products  for 
each  state,  to  serve  as  an  index  of  its  wealth  producing  capacity.  If  the  states  do  not 
have  the  same  population,  reduce  the  production  to  a  per  capita  basis.  Census,  383-4. 
(b)  Compare  the  states  in  character  of  population.  Notice  the  proportion  of  the  sexes, 
races,  natives  and  foreigners,  etc.  Suggest  possible  connection  between  these  proportions 
and  production.  Census,  42-4;  Sta.  Abs.,  36-7,  47-54.  (c)  In  which  state  is  the  average 
duration  of  school  the  greater?  Which  has  the  larger  attendance  in  proportion  to  the 
number  of  children?  Connection  with  production.  Census,  70-76,  112-6;  Sta.  Abs.,  63-8. 

5.  Does  the  kind  of  land  tenure  affect  the  efficiency  of  labor?    Census,  227. 


8  Economics 

4.     Capital. 

a.  Definition.   What  distinguishes  capital  from  other  wealth? 

b.  Circulating  capital  and  fixed  capital ;  specialized. 

c.  How  does  capital  arise?    What  determines  its  increase? 

(1)  Surplus  over  necessaries  which  can  be  saved. 

(2)  The  disposition  to  save. 

d.  Capital   enables  the    process    of    production  to  be  lengthened  and 

thereby  rendered  more  efficient.    Intermediate  products. 

How  would  you  classify  food,  lumber,  trees  in  the  forest,  a  locomotive,  domestic 
animals,  goods  ready  for  sale,  pig-iron  in  the  foundry,  pig-iron  used  as  ballast 
in  a  yacht,  the  learning  of  the  architect,  money? 

One  man  with  a  salary  of  $1,000  spends  it  all.  Another  with  the  same  salary  saves 
half  of  it.  How  do  they  affect  the  business  welfare  of  the  country  differently? 

B.,  107-9,  131-41;  W.,  47-55;  A.,  47-9;  L.,  36-44;  M.,  I,  83-6,  101-9,  127-9;  L.  M.,  65-6, 
79,  93-4;  N.,  82-4;  Mar.,  62-5,  149-58;  G.,  130-40,  382-6;  E.,  103-8;  E.  &  W.,  103-11, 
134-9;  A.  S.,  151-2,  167;  Nich.,  I,  91-7;  Clark,  16-38;  Readings,  301-24;  Seager, 
73-76,  125-136;  Seligman,  313-28. 

0 

EXERCISES. 

1.  Which  state  in  one  of  the  above  pairs  has    the    larger  amount  of  capital  devoted 
to  manufacturing?    Which  has  the  larger  product  of  manufactured  goods?    Census,  331-3. 

2.  Which  has  the  larger   amount  of  capital    (buildings,   machinery,  live   stock)    de- 
voted to  farming?    Which  has  the  larger  amount  of  farm  products?    Census,  234-5. 

3.  The    increase    of    capital    compared    with   the    increase    in    the    number    of   wage- 
earners.    Sta.  Abs.,  514-5;   Census,  331-3. 

4.  In   which    states    has    the    increase    in    capital    been    exceptionally   rapid?     Slow? 
Sta.    Abs.,    514-5;    Census,    331-3. 

5.  In  which  states  has  the  value  of  farm  capital  (implements,  machinery,  live  stock) 
increased  most  rapidly?    In  which  has  it  decreased?    Sta.  Abs.,  540-42;  Census,  291-3. 

5.'    Nature. 

a.  Ill  what  ways  does  nature  contribute  to  production? 

b.  Can  the  resources  of  nature  be  increased? 

B.,  118-21;  L.,  14;  M.,  I,  47-9;  A.,  40-3;  E.,  99-100;  E.  &  W.,  123-4;  G.,  96-101;  Nich., 
I,  66-70;  Seager,  108-9;   Seligman,  300-11. 

EXERCISES. 

1.  In  which   states  has  the  amount  of  public  land  disposed  of  annually  decreased 
notably?    In  which  has  it     increased?    Suggest  explanation.    Sta.  Abs.,  19. 

2.  Compare  the  amount  of  land  selected  for  homesteads  with  that  selected  by  rail- 
roads.   Sta.  Abs.,  19,20. 

3.  Compare  tables  5  and  6,  and  write  a  brief  paper  in  good  literary  form,   giving 
such  results  as  you  can  derive  by  inspection.     Sta.  Abs.,  21-2. 

4.  Same  for  table  7.    Sta.  Abs.,  24. 

5.  In  what  states  has  the  value  of  farm  land  risen  most  rapidly?    In  what  states 
has  it  decreased?    Census,  291-3;  Sta.  Abs.,  540-42. 


Production 


6.  Select  the  five  states  with  the  largest  per  cent  of  farm  land  improved?     The  five 
with   the   smallest.     The   five  with   the   greatest   increase.     The   five   with   the   largest   de- 
crease. '  Census,  288-90;   Sta.  Abs.,  537-9. 

7.  By  comparing  the  tables  on  amount  of  improved  farm  land  with  the  total  areas 
of  the  states,  Sta.  Abs.,  17,  18,  the  proportion  of  improved  land  may  be  found.    Select  by 
inspection  the  five  states  which  have  the  largest  proportion,  and  compute  the  per  cents 
for  them.     Select  the  five  states   (excluding  territories)   which  have  the   smallest  propor- 
tion.   How  do  these  proportions  have  one  meaning  for  old  states  and  a  different  one  for 
new  regions?    Find  the  three  of  the  original  states  which  have  the  smallest  proportion  of 
improved  land.    What  new  states  have  a  larger  proportion? 

8.  Write  a  paper  on  irrigation.    What  states  have  over  200,000  acres  under  irriga- 
tion?   What  states  have  spent  over  $2,000,000  on  irrigation  systems?  Which  state  has  spent 
the  most  per  acre  on  its  irrigation  system?    Which  state  gets  the  largest  crop  per  acre 
from  its  irrigated  land?    Which  gets  the  smallest?    Compare  with  the  value  per  acre  of  all 
crops  in  the  same   states.     Is  irrigation  an   evidence  of  meagre  natural  resources?    Cen- 
sus, 296.    See  also  Sta.  Abs.  (1907),  26,  27. 

9.  Write  a  paper  on  natural  resources  for  water  power.    Census,  342-349.    Are  there 
any  states  or  territories  without  it?    Which  state  gets  the  most  power  from  water?    What 
others  get  over  100,000  horse  power?    What  proportion  of  the  total  power  in  the  United 
States  is  derived  from  water?    What  states  use  a  much  larger  proportion  than  this?     A 
much  smaller?    From  these  figures  try  to  infer  which  states  are  bountifully  supplied  by 
nature  with  water  power;  which  have  little  of  it;  which  have  the  natural  facilities  for  it, 
but  find  other  power  more  convenient;  which  use  it  as  much  as  possible  because  fuel  is 
lacking.    These  inferences  could  be  made  fairly  accurate  and  definite  by  taking  into  con- 
sideration population  and  the  amount  of  manufacture  done.    Census,  331-333,  342-9. 

10.  What  proportion  of  the  wealth   and  population   of  the   United   States  is  in  the 
states  bordering  on  the  waterways  between  the  Great  Lakes  and  the  seaboard?  Census,  32. 

11.  Make   a  list   of  the   cities   in  the   United   States  with  a   population   of  over  two 
hundred  thousand.     Mark  those  that  are  on  navigable  waters.     Census,  100-2. 

12.  Write  a  paper  on  our  national  forests.     Observe  good  literary  form.     Sta.   Abs. 
(1907),  113-16. 

13.  On  the  production  of  lumber.    Sta.  Abs.   (1907),  117-19. 

14.  On  the  fisheries.     Sta.  Abs.   (1907),  120-22. 

6.     The  Organization  of  Production. 

a.  Division  of  labor  between  (a)  individuals  and  (fr)  places. 

What  advantages  does  it  give?    What  disadvantages? 

b.  Production  on  a  large  scale.    Meaning  of  this  phrase. 

(1)  How  connected  with  division  of  labor?    Does  either  exist 

without  the  other  ? 

(2)  How  dependent  on  corporations? 

(3)  How  dependent  on  honesty,  faithfulness,  good  government? 

(4)  What  advantages  and  disadvantages  does  it  bring? 

c.  The  manager,  undertaker,  or  entrepreneur. 

B.,  143-53;  W.,  43-6;  Clow,  11-13;  E.,  111-6;  E.  &  W.,  141-59;  A.,  69-75;  Mar.  162-95; 
A.  S.,  '5-15;  N.,  98-102;  G.,  150-65;  M.,  I,  156-9,  164-204;  L.  M.,  100-11;  L.,  48-52; 
-  Nich.,  I,  104-37;   Seager,  137-154;    Seligman,  290-99,  329-340;   F.,  201-4;   Readings, 
287-300;   Clark,  59-73,  358-71. 


10  Economics 


EXERCISES. 

1.  Taking  gross  value  of  product  as   a   basis,   find   how   the   states   divide  between 
them   the   occupations   of  agriculture   and   manufacturing,     (a)     Find   the   three   states   in 
which  the  proportion  of  manufactured  products  to  agricultural  products  was  largest.    The 
three  in  which  it  was  smallest,    (b)    Find  the  states  in  which  this  proportion  changed  the 
most  in  favor  of  manufactures  from  1890  to  1900.    The  state  which  changed  the  most  in 
favor  of  agriculture,    (c)    Write  a  paragraph  in  good  literary  form  summarizing  these  re- 
sults.   Census,  383-4. 

2.  Write  a  short  paragraph  on  the  localization  of  industries  by  states.    Census,  340. 
Same  by  cities.    Census,  382. 

3.  Select  the  states,  from  two  to  five  in  number,  which  rank  distinctly  above  the 
others  in  the  quantity  produced   of  each    of    the    following   products.     Observe  whether 
other  states  produce  much  or  little,  and  what  sections  of  the  country  produce  the  least : 

Dairy  products,  Census,  253.  Cotton,  Sta.  Abs.,  552-4. 

Eggs,  Census,  255.  Tobacco,    Census,  274;  (Sta.  Abs.,  555-6. 

Honey,    Census,   256.  Beans  and  peanuts,   Census,   275. 

Wool,  Census,  2'57;  Sta.  Abs.,  560.  Broom  corn,   Census,  276. 

Corn,  Census,  258.  Hops,  Census,  277. 

Wheat,    Census,   258.  Apples,   Census,   280. 

Oats  and  barley,  Census,  259.  Peaches  and  pears,  Census,  28L 

Rice,    Census,   260.  Plums  and  prunes,  Census,  282. 

Hay,  Census,  261-3;   Sta.  Abs.,  557.  Grapes  and  wine,   Census,  283. 

Potatoes,   Census,  264;   Sta.  Abs.,  558.  Strawberries,   Census,  287. 

Sugar  cane,  Census,  268;  Sta.  Abs.,  531.        Coal,  Sta.  Abs.,  520-1. 

Sugar  beets,  Census,  270;   Sta.  Abs.,  559        Pig  iron,  Sta.  Abs.,  522-4. 

Maple  sugar,  Census,  273.  Liquors,    Sta.    Abs.,    527-30. 

4.  Write  a  short  paper  on  the  shifting  of  the  area  of  wheat  production.    Sta.  Abs., 
549-51. 

5.  Of  the  population  of  the  United   States  at  least  ten  years  of  age  and   engaged 
in  gainful   occupations,   what  per  cent  is   engaged   in   agriculture?     Select  the   five  states 
in  which  this  per  cent  is  the  largest.    The  five  in  which  it  is  the  smallest.    Census,  85-9. 

6.  Same  for   manufactures. 

7.  Same  for  trade  and  transportation. 

8.  From  these  same  statistics  write  a  paper  on  the  occupations  of  females. 

9.  Write   a  lecture,   or   special   report  to   be  given  to   the   class,   on   the   Industrial 
Revolution,  or  some  phase  of  it: 

a.  Early    stages    in    the     development     of     manufacturing:     (1)    family    system,    (2) 
gild   system,    (3)    domestic   system. 

b.  Conditions  in  England  in  the  eighteenth  century  favorable  to  industrial  progress. 

c.  Great  inventions:    textile  machinery,  steam  engine;  use  of  coal  in  smelting  iron; 
steam  power  applied  to  mining,  manufacturing,  and  transportation. 

d.  Results:     factories,   transportation  a   great  industry,   production   o"   a  large  scale, 
division  of  labor;  amount  and  quality  of  goods;  prices,  fate  of  old  hand-workers;  ultimate 
effects  on   society,  politics,  warfare,   and   general  welfare. 

B.,  53-76,  157-60;  Readings,  104-54;  Clow,  14-18;  Ely,  26-8,  55;  E.  &  W.,  42-73;  Seager, 
2-19;  Seligman,  88-98,  342-7;  Clark,  256-81,  301-15;  Thurston,  Economics  and  industrial 
history,  Part  II;  Toynbee,  Industrial  revolution,  51-5,  71,  90-3,  181-4,  189-94,  199;  Walpole, 
History  of  England,  I,  49-66;  Lecky,  History  of  England  in  the  18th  century,  VII,  276-87; 
Cheyney,  Industrial  and  social  history  of  England;  Earle,  Home  Life  in  the  colonies; 
McVey,  Modern  industrialism;  Hobson,  Evolution  of  modern  capitalism;  Rand,  Eco- 
nomic history  since  1763. 

10.  Write  an  account  of  the  manufacturing  that  is  done   in   your  own  home— food, 
clothing,    implements,  toys,    fancy-work,    etc. :     (a)     kinds,   much   or  little   in   comparison 
with    other    homes;     (b)    parts  of  house  or  premises  devoted  to  it;  tools,  machines,  mate- 
rials, processes;     (c)    work  by  family,  domestics,  outsiders;  training,  compensation;     (d) 
advantages,   disadvantages;    growing   or   diminishing. 

11.  Interview  some  aged  person  about  industries  sixty  years  ago,  and  write  up  the 
results. 


Production  11 


12.  Write  an  account  of  some  existing  example  of  the  craft  system:    (a)  kind,  loca- 
tion, source  of  information;    (b)    forms  and  value  of  fixed  capital;    (c)    circulating  capital 
— ownership,  processes;     (d)  labor,  by  owner,  others;  training,  compensation,  hours;     (e) 
advantages  and  disadvantages,  growing  or  diminishing. 

13.  Same  for  an  example  of  the  domestic  system. 

14.  Visit  a  factory,  taking  notes  on  what  you  see.    Remember  that  it  is  more  credit- 
able to  do  your  own  observing,  estimating,  or  counting,  than  to  take  what  some  one  tells 
you;   but  two   or  three  may  advantageously   co-operate,  each   concentratirg  attention   on 
certain  things:    Write  up  in  good  form:  ', 

I.        Introduction. 

1.  Name  of  company.    Kind  and  location  of  factory. 

2.  Time,  manner,  and  length  of  visit. 
II.        The  fixed   capital. 

1.  Buildings,  number,   size,   construction,  departments. 

2.  Machinery    for    (a)    supplying    power,    (b)    handling    materials    and    goods, 
(c)   manufacturing. 

III.        The  circulating  capital. 

1.  Materials  used.    What  supply  on  hand? 

2.  Trace  course  of  materials  into   finished  product. 
IV.        The  labor. 

1.  How  many  workers?    Men,  women,  children. 

2.  How    many    different   kinds    of   work?     Largest    number   of   workers    doing 
any  one  kind. 

3.  Examples  of  work   that  is    (a)    disagreeable,    (b)    exhausting  or   dangerous, 
(c)   easy,    (d)   that   requires   great   skill. 

4.  Examples  of  idleness. 

V.        Conclusion.     Advantages   and   disadvantages;    compare   with   home   or   shop   work 
of  the  old  style. 

1.  To  the  laborers. 

2.  To  the  consumers,  in  (a)   quantity,   (b)  price,  and  (c)  quality  of  goods. 

15.  Trace    the    introduction    of   a    new   invention:     railroads,    Sta.    Abs.,    579-80;    tele- 
phones, 599;   telegraphs,  598;   steamboats  in   place  of  sails,  603;   gas  engines  and  electric 
motors.    Census,  330. 

16.  The  concentration  of  population  in  cities.    Census,  100-102,  350,  351.    Why  is  this 
a  result  of  the  industrial  revolution? 

17.  What  proportion  of  the  manufactured   products  of  the   United   States  are  made 
under  the  ownership  of  individuals?    Of  firms    and    limited    partnerships?     Incorporated 
companies?     For   each   of   these  forms  of   organization,   which   group   of  industries   ranks 
highest?    Lowest?     Census,  326. 

18.  Compare  the   increase   in   the   value   of   farm    property   with   the   increase   in   the 
capital  invested  in  manufacturing.    Census,  217,  300,  301.    Account  for  the  difference. 

19.  Butter  and  cheese  made  on  farms  and  in  factories.    Census,  253.    What  proportion 
of  the  total  product  of  each  is  made  in  factories?    Of  the  states  producing  over  10,000,000 
pounds,   which  reported  the   largest   proportion  of  butter  from   factories?     The   smallest? 
The  largest  proportion  of  cheese?    The  smallest?    As  far  as  possible  account  for  the  great 
difference  in  the  proportions  between  the  two  products  and  between  the  different  states. 

20.  Compare    the   increase   in   the   capital    of   all    manufacturing    establishments   with 
the  increase  in  the  number  of  such  establishments.    Census,  300,  301.    Compare  with  the 
change,  or  lack  of  change,  in  the  size  of  farms.    Census,  217;  Sta.  Abs.,  674.    Put  in  good 
literary  form,  using  few   figures. 

21.  Is  there  a  connection  between  the  size  of  a  farm  and  the  kind  of  a  crop  that  can 
be  most  profitably  raised  on  it?    Census,  224. 

22.  Which  state  has  the  largest  farms?    Which  the  smallest?    Sta.  Abs.,  537-539;  Cen- 
sus, 226,  234. 


12-  Economics 


22.  Which  group   of  manufacturing  industries   shows   the  greatest   degree  of  concen- 
tration  in   large   establishments?     Census,   324,   321.     Which   specified   industry    shows   the 
greatest  degree  of  concentration?    Census,  302-321.    Which  industry  with  a  product  valued 
at  over  $50,000,000,  shows  the  least  degree  of  concentration?    Census,  322;  Sta.  Abs.,  679-82. 

23.  Which    state    shows   the   greatest    degree   of   concentration   of    manufacturing    es- 
tablishments?   Which  the  least?    Census,  331-333;  Sta  .Abs.,  514-5. 

24.  Analyze  Table  159,  Census,  327. 

25.  Analyze  Table  166,  Census,  336,  337. 

26.  Analyze   production   on  the   largest  scale   as    represented   by   Table  161,    Census, 
328,   329.     What  was   the  average  number   of  plants   controlled   by   one   combination?     In 
which  industrial  group  was  this  average  the  largest?    What  was  the  average  number  of 
wage-earners   for   each   combination?     For   each   plant?     In   which   individual   group   were 
these  averages  the  largest?    What  was  the  average  amount  of  capital  for  each  combina- 
tion?    For   each   plant?     For    each   wage-earner?     In   which   industrial    group   were   these 
averages  the  largest?    What  was  the  average  value  of  the  product  for  each  combination? 
For  each  plant?    For  each  wage-earner?     In  which  industrial  group  were  these  averages 
the  largest? 

7.     Proportional,  Increasing,  and  Diminishing  Returns. 

a.  If  the  labor  and  capital  devoted  to  an  industry  be  doubled,  will  the 

product  be  increased  proportionately? 

b.  What    conditions    would    give    increasing    returns?      Diminishing 

returns  ? 

c.  In  which   classes   of  industries   would   increasing   returns   be   most 

probable?     Diminishing  returns? 

d.  How  are  returns  affected  by  increase  of  population?    By  inventions 

and  improvements? 

B.,  164-70;   L.,  18-23;    L.   M.,  130-48;   M.,   I,   50-2,  229-52;   A.,   56-7;   Mar.,  115-28;   G., 
223-8;   W.,  23-7;    F.,  61-72;   E.    &  W.,  125-9;   Seager,  113-119,  128-130. 

EXERCISES. 

1.  To  get  evidence  on  the   question  whether  returns   in  the  United   States  are  in- 
creasing or  decreasing,  compare  the  quantities  of  the  following  commodities  produced  per 
capita   for   several   years  back : 

Wool,  wheat.     Sta.  Abs.,  675. 

Corn,  cotton,  rice,  coal,  silver.    Sta.  Abs.,  676. 

Petroleum,  steel,  copper.    Sta.  Abs.,  677. 

2.  Compare  the  value  per  capita  of  farm  products;  of  manufactures.    Sta.  Abs.,  674, 
678.     In  what  way   may  these  results  be   erroneous? 

3.  Find  the  consumption  per  capita: 
Sugar.     Sta.   Abs.,  683. 

Coffee,   tea.     Sta.   Abs.,  684. 
Liquors.    Sta.  Abs.,  687. 

4.  Reproduce    on    the    blackboard    the    chart    in    Bogart,    Economic    history    of   the 
United  States,  429;  or  Seligman,  422-3. 


The  Medium  of  Exchange  13 

PART  III.     THE  MEDIUM  OF  EXCHANGE. 

A.       MONEY. 

1.  Introduction. 

a.  Functions. 

(1)  Measure  of  value. 

(2)  Medium  of  exchange. 

(3)  Standard  for  deferred  payments. 

b.  Kinds:  (i)    Standard    and    (2)    token    or    representative    money. 

Commodities,  jewels,  precious  metals,  coin,  paper. 

c.  Qualities  needed  in  the  material  used  as  money. 

d.  Definitions :     Money,    coin,    mint,    seigniorage,    free    coinage,    legal 

tender.   Subsidiary  and  minor  coins. 

E.  &  W,  194-215;  B.,  210-18,  232-4;  W.,  97-105;  E.,  141-4,  151;  L.,  67-82;  A.,  118-23, 
134-6;  M.,  II,  17-24;  L.  M.,  286-90;  A.  S.,  24-8;  N.,  147-8;  G.,  748;  F.,  98-108, 
431-6,  452-7;  Clow,  19-22;  H.,  180-88;  Seager,  302-8;  Seligman,  449-54;  Nich.,  II, 
88-109;  White,  Money  and  Banking,  3-34;  Readings,  387-400;  Laughlin,  Princi- 
ples of  Money,  1-33;  Kinley,  Money,  1-77;  Scott,  Money  and  Banking,  1-52; 
Clark,  538-54. 

2.  •  The  Value  of  Standard  Money. 

a.  How  shown  by  the  prices  of  goods?    Index  numbers. 

b.  The  three  factors.    Result  of  increase  or  decrease  in  each? 

(1)  Volume  of  business  in  which  money  is  used. 

(2)  Quantity,  in  bulk  or  weight,  of  metal  used  as  money.    How 

does  change  in  quantity  affect  total  value  of  the  money? 

(3)  Rapidity  of  circulation. 

c.  Express  these  factors  in  an  algebraic  formula. 

d.  How  is  the  value  of  coin  affected  by  the  cost  of  production  of  the 

metal  of  which  it  is  made? 

c.     For  which  of  the  three  functions  is  the  fitness  of  money  impaired 
when  its  value  changes? 

B.,  219-29,  245-9;  W.,  100-111;  E.,  150-1;  A.,  137-8;  N.,  319-25;  M.,  II,  26-45;  L.  M., 
291-311;  Nich.,  II,  118-24;  F.,  436-42;  H.,  193-206;  Clow,  20-2,  172-4;  Seager,  345- 
55;  Seligman,  454-60;  Laughlin,  Principles,  34-46,  225-365;  Scott,  53-68;  Kinley, 
78-198,  224-59. 

EXERCISES. 

1.  The   history   of   gold   and   silver   since  1800.     (a)    Ratio   of  production,    in   weight. 
(b)    Commercial   ratio,     (c)    Connection   between  the   two.     Sta.   Abs.,  649.     See   Laughlin, 
Bimetallism,  161-75;   Principles,  60-70;   Kinley,  281-4. 

2.  Effect  on  prices  and  wages  of  the  increased  production  of  gold  after  1850;   after 
1895.     Sta.    Abs,.   569;    Bulletins,    Bureau   of   Labor. 


14  Economics 


3.  Find  the  value  in  dollars  and  cents  of  the  following  monetary  units  of  foreign 
countries.  The  fineness  is  nine-tenths  unless  otherwise  specified: 

a.  French  franc.    The  10-franc  gold  coin  weighs  49.782  grains. 

b.  The  value  of  the  franc  when  both    France  and  the   United   States  were  on  the 
silver   standard  (before  1834)   may  be  found  by  comparing  the  weights  of  the   silver  dollar 
and  of  the  5-franc  silver  coin  of  385.809  grains. 

c.  German   mark.     The  10-mark   gold   coin   weighs  61.459   grams. 

d.  English  pound.    The  gold  sovereign  weighs  123.274  grains.    It  is  .916?^  fine. 

e.  Russian  ruble.    The  10-ruble  gold  coin  weighs  132.758  grains, 
f.    Japanese  yen.    The  10-yen  gold  coin  weighs  128.6  grains. 

g.  Chinese  tael  .  The  Canton  silver  tael  weighs  580  grains.  Use  the  present  com- 
mercial ratio. 

h.  The  silver  rupee  of  India  weighs  180  grains  and  is  .916^  fine.  Up  to  1893  it 
was  coined  without  limit.  Select  some,  year  before  that  date,  use  the  commercial  ratio 
for  that  year,  and  compute  the  value  of  the  rupee  in  cents. 

3.  Gresham's  Law  and  the  International  Flow  of  Money. 

a.  If  there  are  full-weight  coins,  light-weight  coins,  and  token  money 

in  circulation  together,  which  will  be  selected  for  use  in  the  arts? 
For  export? 

b.  Imports  and  exports ;  favorable  and  unfavorable  balance  of  trade. 

c.  When  there  is  a  balance  to  be  paid,  trace  the  results  on  ( i )  the  flow 

of  money  between  the  countries,  (2)  amount  of  money  in  each 
country,  (3)  prices  in  each  country,  (4)  demand  in  each  for  the 
goods  of  the  other,  and  the  imports  and  exports  of  each. 

B.,  237,  271-4;  L.,  306;  G.,  194-8;  Nich.,  II,  113-15;  N.,  414;  F.,  443-7;  Clow,  62.-S, 
158-62;  Seager,  309;  Seligman,  467-8;  Laughlin,  Principles,  366-437;  Kinley,  78-98. 

EXERCISES. 

1.  Write   a   paper   on   the   importation     and     exportation     of    gold.     Sta.    Abs.,   151. 
Neglect  the  distinction  between  domestic  and  foreign  exports.     Use  few  figures  and  ob- 
serve good  literary  form. 

2.  Compare  with   the  balance  of  trade.     Sta.   Abs.,  170. 

4.  Token  Money. 
a.-    Kinds. 

(1)  Over-valued  coin  and  paper. 

(2)  Convertible  and  inconvertible. 

b.  How  issued  by  (i)  governments  and   (2)  banks? 

c.  Value  of  token  money  and  results  of  issuing  it  depend  on  amount. 

(1)  Small  amount  issued  suddenly;  gradually. 

(2)  Issue  equalling  amount  of  standard  coin  in  circulation. 

(3)  Beyond  this  amount:    different  results  for  convertible  and 

inconvertible  money ;  for  over-valued  coin  and  paper. 

d.  How   does   a   country   carry  on    foreign   trade   when   its   money   is 

inconvertible  and  depreciated? 

B.,  234-44,  249-55;  A.,  139-40;  N.,  413-18,  506-10;  L.,  160-70;  F.,  447-9;  Mill,  II,  88-91, 
195-201;  G.,  212-27;  W.,  121-42;  E.,  144-7;  H.,  188-92;  L.  M.,  344-9;  Nich.,  II, 
115-7,  125-30;  Readings,  400-5;  Seager,  316-9;  Seligman,  451-4;  Laughlin,  Prin- 
ciples, 508-31;  Kinley,  329-89;  Scott,  99-116. 


The  Medium  of  Exchange  15 


EXERCISES. 

1.  Experience  with   inconvertible   paper.     F.,   447-52;   L.   M.,   344-60. 

a.  The  assignats  of  the  French   Revolution.     Readings,   406-30. 

b.  The    United    States.     B.,    249-55,    281;    Report    of    monetary    commission;    Bolles, 
Dewey,    Knox,   Hepburn,   White,    Bogart,    Coman. 

2.  Experience   with   bimetallism.     E.,    152-5;    Seligman,   461-6;    Horton. 

a.  France  and  the  Latin   Union.     Laughlin,   Bimetallism,  146-60. 

b.  Germany.     Laughlin,   Bimetallism,  135-45. 

c.  China    and    Japan. 

d.  United  States.     B.,  280-1;   F.,  459-62;  L.  M.,  316-24;   Laughlin,  Bimetallism,  10-121; 
Principles,  451-507;  Seager,  309-16;   Seligman,  461-6;  Scott,  83-93,  314-49;  Report  of  monetary 
commission,   Bolles,  Dewey,   Hepburn,   Poor,   Russell,  Taussig,  White,   Bogart,  Coman. 

3.  Write  a  paper  in  good   literary  form  on  the  amounts   of  gold  and   silver   coined 
in  the  United  States  since  1800.    Sta.  Abs.,  651.    Note  the  amounts  now  in  circulation  and 
in  the  treasury.     Sta.    Abs.,  111-13. 

4.  How  heavy   would   the   silver   dollar   have   to   be   in   order   to   contain   a   dollar's 
worth  of  silver? 

5.  Compile  a  table  of  the  kinds  and  amounts  of  money  now  in  circulation  in  the 
United  States.    Sta.  Abs.,  111-13. 

6.  Write  an   account   of   each   kind   of  paper   money   now  in   circulation,   obtaining 
your  information  as  far  as  possible  from  laws,  statistics,  and  samples  of  the  money  itself. 
This   outline   is   suggested: 

a.  When    first    issued?     Why? 

b.  Nature;    manner  of  issue,   security,  redemption,   legal   tender   quality. 

c.  Fluctuations    in   the   amount   outstanding,    with   explanations. 

d.  Later  legislation  and  its  effects. 

PROBLEMS. 

1.  When  a  general  change  has  taken  place  in  the  cost  of  production  of  commodi- 
ties, as  measured  in  labor,   should  the  debtor  repay  a   purchasing  power   equal   to   what 
he  borrowed,  or  the  product  of  an  equal  amount  of  labor?    F.,  453-6;  Laughlin,  Principles, 
60-70;   Kinley,  281-4. 

2.  What    arrangements    would    constitute    bimetallism?     Observe    (a)    coinage,    (b) 
legal  tender,  (c)  mint  ratio,  (d)  commercial  ratio,  (e)  money  in  actual  use,  (f)  in  one  or 
more  countries.    B.,  289-99;  W.,  345-56;  Seager,  355-60;  F.,  457-9. 

3.  How  would   bimetallism   work  when  the  discovery  of  new  mines  decreased   the 
cost  of  production  of  one  of  the  metals  while  exhaustion  of  old  mines  increased  the  cost 
of  production  of  the  other?     When   the  time   comes   to   change   the   mint   ratio,  which   of 
the    two    standards    should    suffer    the    change?     F.,    459-61;    M.,    II,    46-9;    Scott,    293-312; 
Giffen,    The    Case    against    Bimetallism;    Taussig,    Laughlin,    Kinley. 

4.  It   is    asserted   by   some   that   decrease   in   the   demand   for   silver   since   1870    has 
been  the  cause  of  the  fall  in   its  value.     If  this  were   true,   how   would   the  relation   be- 
tween value  and  cost  of  production  be  affected?    The  amount  of  production?    Compare 
the   amount    of   coinage  by   the    United    States   before   1870   with   the   amount    since;    the 
annual  production  of  silver,  by  weight,  before  the  fall  in  value  with  the  production  since. 
Sta.  Abs.,  649,  651;  Laughlin,  Bimetallism,  161-75. 

5.  A  multiple  or  tabular  standard.    F.,  456;   L.,  76-7;  Kinley,  275-81;  Smart,  Studies 
in   Economics,  141-58. 

6.  Discuss    the   function   performed    by   the    silver    dollars    stored    in    the   Treasury. 
What  gives  the  silver  certificates  their  value?    What  disposition  should  be  made  of  the 
silver? 

7.  Should   the   greenbacks  be  retired? 

8.  Should  our  silver  currency  be  made  by  law  convertible  into  gold? 

9.  Is  a  general  rise  of  prices  desirable?    H.,  228-31. 


16  Economics 

B.       CREDIT. 

1.  Forms  of  Credit.   How  does  each  do  the  work  of  money? 

a.  Book  credit. 

b.  Promissory  notes  issued  by  (a)  persons,  (b)  banks,  and  (c)  govern- 

ments.  What  are  bonds? 

c.  Bank  deposits,  checks,  and  drafts. 

d.  Commercial  drafts  or  bills  of  exchange. 

B.,  256-64;  M.,  II,  54-5,  59-63,  173-80;  L.  M.,  328-34,  410-7;  L.,  145-51;  E.,  158-9;  N., 
183-6;  G.,  276,  292-4;  F.,  465;  Seager,  323-5;  Seligman,  469-72. 

2.  Banking. 

a.  What  is  a  bank?    Its   functions:     (a)    receive  deposits,    (b)    make 

loans,  (c)  conduct  exchange,  (d)  issue  notes. 

b.  The  check  and  clearing  house  system. 

c.  Bank  accounts  and  statements. 

d.  Relation  between  deposits,  loans,  and  reserve.    What  is  the  effect  of 

withdrawing  a  deposit  in  cash? 

B.,  265-9;  W.,  313-9;  L.,  151-3,  328-38;  N.,  158-67,  179-86;  G.,  280-9;  Dunbar,  Theory 
and  history  of  banking,  1-81;  E.,  162-3;  A.,  151-7;  Nich.,  II,  164-7;  H.,  235-7; 
F.,  462-5;  Clow,  142-5;  Seager,  323-31;  Seligman,  472-5;  Fiske,  The  modern  bank. 

EXERCISES. 

1.  Describe   the    organization    and    working    of   a   bank,    deriving   your    information 
from  observation  and  interviews. 

2.  The    origin    of   the    national    banks    in    the    United    States.     Dunbar,    132-53;    B., 
282-3;  L.,  339-43;  F.,  468-71;   Histories  of  the  Civil  War. 

3.  Write  a  paper  on  the  distribution  of  national  banks  by  states  and  cities,  using 
few  or  no  figures.     Sta.  Abs.,  129-30. 

4.  Analyze  the  changes  in  the  number  of  national  banks  and  in  their  capital  stock. 
Sta.  Abs.,  126. 

5.  Study   a   bank    statement.     One    may   be   found   occasionally   in    a   newspaper   or 
obtained  from   any  bank.     Write   an  explanation   of   each  item   in  it.     Paste  the   printed 
statement  on  your  manuscript. 

6.  Study   a   check   which   has   been    used.     Trace    its    course    from   the   person   who 
drew  it  until  it  returns  to  him  again.    Eaton,  How  to  do  business,  18. 

7.  Witness  the  operations  of  a  clearing  house  and  write  up  what  you  see. 

8.  Analyze  the   transactions   of   the   New   York   clearing   house,    and   compare   with 
those  of  other  cities.     Sta.  Abs.,  134. 

9.  Find   and   explain  the   requirements    of   the   law   about   the   reserves   of  national 
banks.    Inspect  one  or  more  bank  statements  and  see  how  near  the  reserve  is  to  the  legal 
limit.     If   possible,    ask   a   banker   in   what   other   banks   he   has   part   of   his   reserve    de- 
posited. 

10.     Illustrate  the  connection   between   loans   and   deposits  by  the   experience   of  na- 
tional banks  for  the  past  twenty  years.     Sta.  Abs.,  127-8. 


The  Medium  of  Exchange  17 


11.  Analyze   the   loans   of  banks   with   reference   to   the   kinds  of   security  for   them. 
Observe   the   peculiarities   of   certain   cities   and    states,   and   account   for   them   as   far   as 
possible.    Sta.  Abs.,  129. 

12.  What  difference  can  you  find  between  the  resources  of  national  banks  and  those 
of  savings  banks?    Sta.  Abs.,  119,  131. 

13.  Describe  the  banking  system  of  some  other  country.    Dunbar,  154-99;   Seligman, 
843-6;   Fiske,  279-324. 

3.  The  Advantages  of  Credit. 

a.  Convenience. 

b.  Saves   use  of  the  precious  metals  as  money.    Exchange ;   domestic 

and  foreign. 

c.  Secures  fuller  use  of  the  agents  of  production. 

B.,  270-1;  G.,  277-80;  L  .M.,  325-27;  M.,  II,  50.4,  197-9;  E.,  160-2;  Clow,  145-57; 
Seager,  327-34,  361-7;  Kinley,  199-223;  Seligman,  471-2;  Lectures  on  commerce, 
218-30. 

PROBLEMS. 

1.  Is  credit  capital?    Does  it  create  capital? 

2.  What  are  the  advantages  of  credit? 

3.  The  feudal   serf  was  practically  unable  to   sell   or  mortgage  his  land.     Was  this 
to   his   advantage?     Consider   also   entailed    estates;    allotments   of   land    on    Indian    reser- 
vations. 

4.  Much  wealth  is  now  represented  by  securities  which  can  be  pledged  as  collateral 
for  a  loan   with  very  little   ceremony.     What   does  this  mean  for  the   use   of  credit  and 
the  stability  of  wealthy  families? 

4.  Changes  in  the  Volume  of  Credit. 

a.  Credit  a  part  of  the  circulating  medium. 

(i)     To  what  extent  has  credit  displaced  money? 

(2}     Volume  of  credit  changes — how  much  and  how  quickly? 

(3)     Effect  of  these  changes, on  prices  and  international  trade. 

b.  The  credit  cycle. 

(i)     Effect  of  a  belief  that  prices  will  rise  or  fall  on  demand  for 

goods,  readiness  to  sell,  and  prices. 
(2}     Speculation :  expansion  of  credit,  actual  rise  of  prices. 

(3)  Panic:    fear,  withdrawal  of  bank  deposits,  demand  for  loans, 

contraction  of  credit,  fall  of  prices. 

(4)  Depression :     lack    of   confidence,    stagnation,    little    use    of 

credit;     low    prices,    gradual    recovery.     Apparent    over- 
production. 

c.  Separation  of  producers  and  consumers. 

B.,  274-8;  W.,  156-60;  N.,  168-72;  L.  M.,  325-43;  M.,  II,  64-70,  77-9;  H.,  295-9;  G., 
334-41;  Nich.,  II,  131-7,  206-14;  Clow,  132-41;  F.,  333-55;  Seligman,  476-8,  487-90. 


18  Economics 


EXERCISES. 

1.  Put  on  the  blackboard  the  chart  in  Laughlin,  Industrial  America,  213. 

2.  How  much  did  the  deposits  of  banks  contract  after  the  panic  of  1893?    Sta.  Abs., 
128.    After  the  panic  of  1907?    If  deposits  be  counted  as  circulating  medium  the  same  as 
coin  and  paper  money,  what  proportion  did  this  contraction  make  in  the  total  circulating 
medium? 

3.  How  much  did  the  clearings  of  New  York  banks  contract  after  each  of  the  fol- 
lowing panics?— 1857,  1873,  1884,  1890,  1893,  1903,     Sta.   Abs.,   133. 

4.  Judge   from   the  course   of  bank   deposits   and   clearings   how  long  a   depression 
lasts.    Sta.  Abs.,  128,  133.     How  long  does  the  period  of  speculation  last? 

5.  Make  a  study  of  seasonal  fluctuations  in  the  reserves  of    banks.     Sta.  Abs.,  120-3. 
To  what  extent  are  these  fluctuations  confined  to  the  financial  centers? 

6.  It    is    sometimes    said    that    bankers    cause    panics    intentionally.      How    are    the 
earnings  and  dividends  of  banks  affected  by  panic  years?     Sta.   Abs.,  126. 

7.  White  an  account  of  the  panic  of  1907. 

8.  State  the  provisions  of  the  Aldrich-Vreeland  Act. 

PROBLEMS. 

1.  How    can    elasticity    of   the    currency     be     best     secured?      Laughlin,    Industrial 
America,  192-218. 

2.  Should   national   banks   be   allowed   to   issue   notes    on    other    security   than   gov- 
ernment bonds?    Readings,  431-52. 

3.  Should  national  banks  be  allowed  to   establish  branches? 

4.  In    what    ways    can    panics    be    avoided    or    diminished    in    intensity?     Seligman, 


5.    What  are  the  warnings  of  an  approaching  panic?    Study  prices  of  commodities, 
imports  and  exports,  bank  reserves,  rates  of  interest.     Sta.   Abs.   for  1907,  624-6. 


Commerce;  the  Process  of  Exchange  19 


PART  IV.     COMMERCE :    THE  PROCESS  OF  EXCHANGE. 

1.  Introduction. 

a.  Define :    commerce,   trade,  wealth,  production,  labor.    What   is  the 

problem  before  us  in  studying  these  phenomena? 

b.  The  elements  of  commerce:    (i)  variety  of  wants;   (2)  division  of 

occupations.    Make  an  original  illustration  showing  how  both  par- 
ties to  a  trade  may  gain. 

c.  The  organization  of  commerce,    (i)    Define:  merchant   (notice  de- 

rivation), wholesale,  retail,  jobber,  broker,  commission  merchant. 

(2)  Who  takes  the  initiative,  the  buyer  or  seller? 

Clow,  1-22,  106-16,  193-4;  E.  &  W.,  230-45;  L.,  83-101;  E.,  118-37;  L.  M.,  377;  Web- 
ster, Gen.  history  of  commerce,  3-6. 

EXERCISES. 

1.  Prepare    a    special    report    on    the    medieval    fairs    and    markets.     Cheyney,    75-9; 
Readings,  325-31. 

2.  Describe  a  fair  of  the  present  time. 

3.  Describe   some   market   of  the  present  time. 

4.  What  proportion  of  the  persons  in  the  United  States  having  gainful  occupations 
are  in  trade  and  transportation  compared  with  earlier  years?    In  what  special  occupations 
has  the  proportion  increased  the  most?    Sta.  Abs.,  41;   Census,  24-7. 

5.  Write  a  paper  in  good  literary  form  on  the  sources  of  our  supply  of  wool.    Sta. 
Abs.,  470-5,  560-61. 

6.  Same  for   sugar.     Sta.   Abs.,   476-9,   431-4,  559. 

7.  Write  a  paper  in  literary  form   on  the  regions  of  production  and   consumption 
of  each  of  the  following  products: 

Wheat.    Sta.   Abs.,  549-51,  423-5,  427-30,  465. 
Cotton.     Sta.  Abs.,  552-4,  514-18,  466-7. 

PROBLEMS. 

1.  Is  a  railroad  brakeman  a  producer  of  wealth?    A  merchant?    A  bookkeeper?    A 
promoter  who  organizes  a  new  company  but  leaves  its  management  to  others? 

2.  Of   the   various    classes    of   industries    (See    Part    II,   2),    why    should    commerce 
be  selected  for  special  treatment? 

3.  What  is  the  problem  before  us  in   studying   Part  IV? 

N.  B.     It  will  be  well  to  return  to  the  discussion  of  problems  2  and  3  at  the  conclu- 
sion of  Part  IV. 

2.  Classes  of  Merchandise. 

a.  Find  several  classifications ;  make  one  of  your  own. 

b.  What  factors  determine  the  place  of  production  of  each  class.    Con- 

sider   (i)    nature— climate,   materials   in   the   ground,    (2)    labor, 

(3)  capital. 

Clow,  24-36,  96;  Readings,  481-6;  Chisholm,  Handbook  of  commercial  geography, 
14-51;  Adams,  Com.  Geog.,  1-48;  Trotter,  Geog.  of  commerce,  1-34;  Rocheleau, 
Geog,  of  commerce  and  industry,  1-23. 


20  Economics 


EXERCISES. 

1.  Write  a  paper  on  the  imports  of  one  of  the  following  groups  of  articles.    What 
are  the   important   items   in   the   group?       Notice  if  some   are    increasing   and   others    de- 
creasing.    Make   a   chart   to    show   the   fluctuations:     Chemicals,    manufactures    of   cotton, 
fibres  and   textile   grasses,    fish,    fruits   and   nuts,    glass,    hides    and   skins,   iron    and    steel, 
silk  and   its  manufactures,   spirits  and  other  liquors,    sugar  and   molasses,   wood   and   its 
manufactures,  wool  and  its  manufactures.    Sta.  Abs.,  299-329. 

2.  Compare  the   proportion   of   some   class   of  goods   in  the   exports   of  the   United 
States  for  a  recent  year  with  the  proportion  for   some  earlier  year,  say  a  quarter  or  half 
a  century  ago.    Account  for  the  change.    Sta.  Abs.,  GG4-5;  Clow,  51-61. 

3.  Same   for   imports.     Sta.    Abs.,    662-3;    Clow,   37-49. 

4.  Compare  the   United  Kingdom,   Belgium,   Brazil,   and   Canada   in   the  proportion 
some  class  of  goods  rrlakes  in  their  exports.     Statesman's   Year-Book. 

5.  Same   for   imports.     Statesman's  Year-Book. 

6.  See  exercises  under  Part  II,  6. 

PROBLEMS. 

1.  What  change  may  we  expect  fifty  years  will  bring  in  the  foreign  trade  of  this 
country? 

2.  With  what  countries  may  we  expect  that  our  trade  will  increase?     Decrease? 

3.     International  Trade. 

a.  Balance  of  trade — favorable  or  unfavorable.    Causes  of  a  recurring 

balance. 

b.  International  flow  of  money. 

c.  International  values. 

d.  The  effect  of  restrictions  on  international  trade. 

B.,   329-43;    Clow,    62-8,   158-74;    Seager,    368-83;    Seligman,    491-501;    F.,    480-9;    Read- 
ings, 453-72. 

EXERCISES. 

1.  Write  a  paragraph,  in  good  literary  form,  on  the  balance  of  trade  of  the  United 
States  for  the  last  fifty  years.    Sta.  Abs.,  170. 

2.  What  foreign  countries   have  a   favorable   balance   of  trade?     Unfavorable?     Sta. 
Abt.,  692-3. 

3.  With   what  foreign   countries   is   the   balance  of  trade   in   our   favor?     Sta.    Abs., 
692-3. 

4.  See   Clow,   65-7.     Prepare   a   table  and   charts   like   these   for    some   country,   with 
brief  explanations. 

5.  Study   some   country   with   reference   to    its   balance   of   trade.     Clow,    69-89;    Sta. 
Abs.,  692-93.    If  the  balance  is  a  recurring  one,  account  for  it  as  far  as  possible. 

6.  Study  the  recent  tariff  history  of  the  United  States.    Clow,  44-6;  Taussig,  Tariff 
history;    Laughlin,    Industrial    America,    33-66;    Bogart,    369,    394-7;    Coman,    298-305;    Stan- 
wood,  Tariff  controversies. 

7.  Of  some  other  country.     Seligman,  501-4;   Consular  reports;   Bastable,   The   com- 
merce of  nations. 


Commerce;  the  Process  of  Exchange  21 


8.  Describe  the  duties  imposed  on  commodities  in  the  United   Kingdom.   Clow,  G9, 
70;   Statistical  Abstarct  of  the  United  Kingdom. 

9.  Describe    some   system    of   navigation   laws   or   shipping    subsidies.     Clow,   189-91; 
Reports    of   the    U.    S.    Commissioner   of    Navigation;    Johnson,    Ocean   and   inland    water 
transportation,  288-300. 

PROBLEMS. 

1.  If   labor   in   Kansas   is    equally   productive   with    that   of    Germany   in   the    manu- 
facture  of  cloth,   but  twice   as   productive   in   the   raising  of   wheat,   the   situation   may   be 
represented  thus: — 

A  day's  labor  produces — 

in  Germany x  cloth y  wheat, 

in    Kansas .v  cloth 2 y  wheat. 

If  the  two  countries  trade,  how  does  each  come  out  at  each  of  th?  following  rates? — 

(1)  x  cloth  of  Germany  for  y  wheat  of   Kansas. 

(2)  x  cloth  of  Germany  for  1y  wheat  of  Kansas. 

(3)  x  cloth  of  Germany  for  ~\.y2  y  wheat  of  Kansas. 

Find  the  per  cent  of  gain  or  loss  for  each  country.  Compute  it  at  first  without  allowing 
anything  for  the  cost  of  making  the  exchange.  Then  compute  it  again,  allowing  %  y 
wheat  for  cost  of  transportation. 

2.  State  the  arguments  in  favor  of  a  protective  tariff,  and   discusss  the  validity  of 
each.     Clow,    185-9;    Readings,    472-512;    Clark,    517-37;    F.,    491-503;    A.    S.,   219-32;    M.,    II, 
532-9;  L.  M.,  450-6,  6C5-28;  L.,  289-302;  \V.,  388-402;  E.,  280-5;   H.,  422-40;   Seligman,  505-16; 
Bastiat,  Sophisms  of  protection;   Bayles,   Sophisms  of  free  trade;  Atkinson,  Taxation  and 
work;    Patten,   Economic  basis   of  protection;   Mongredien,   Free   trade   in   England;    Bas- 
table,  The  commerce  of  nations;  Taussig,  State  papers  and  speeches  on  the  tariff;  Smart, 
Return  to  protection. 

3.  To  what  extent  do  these  arguments  apply  to  the  United   States  at  the  present 
time? 


4.     Facilities  for  Transportation  and  Communication. 

a.  Waterways,  harbors,  rivers,  and  canals. 

b.  Highways. 

c.  Railroads  and  electric  railways. 

d.  Post  office. 

e.  Telegraph  and  telephone. 
/.  Pipe  lines,  conduits,  etc. 

What  is  is  the  effect  on  the  manner  of  installing  and  operating  these 
facilities  when  (i)  a  large  fixed  capital  is  necessary,  (2)  opera- 
tion must  be  continuous,  (3)  increase  of  traffic  does  not  involve 
proportionate  increase  in  operating  expenses? 

Seager,  460-1,  467-9;   Clark,  396-450;   Seligman,  517-21;   F.,  517-30;  H.,  153-8. 

General  references:  Hadley,  Railroad  transportation;  Acworth,  Elements  of 
railway  economics;  Noyes,  Am.  railroad  rates;  Bullock,  (3rd  ed.),  343-72; 
Dixon,  State  railroad  control;  Haines,  Restrictive  railway  legislation:  B.  H. 
Meyer,  Gov.  regulation  of  railway  rates;  Johnson,  Am.  railway  transportation, 
Ocean  and  inland  water  transportation;  Lectures  on  commerce,  29-128. 


22  Economics 


EXERCISES. 

1.  Write    up    in   literary    form    the   recent    history    of    the    merchant    marine   of   the 
United  States.    Sta.  Abs.,  603-26. 

a.  The  number  and  tonnage  of  sailing  vessels  and  of  steam.    603. 

b.  The  distribution  of  ownership.    603. 

c.  Employment   in   foreign   trade,   coastwise  trade,   fisheries.    604. 

d.  Vessels  built,  by  kinds  and  localities.    605,  606. 

e.  Tonnage  entering  from  foreign   countries,  607;   Clearing,   608. 

f.     Distribution   of   entrances    and    clearances,    by   foreign    countries,   609-12;    by   sea- 
ports of  the  United  States,  613-15;   by  nationality  of  the  vessels,  616-617. 

g.     Value   of  goods  carried   by   American   and   foreign   vessels   respectively:    imports, 
618;  exports,  619;  total  foreign  trade,  620. 

h.     Tonnage   movement   in   domestic   lake   trade,   612,   613. 
i.    Disasters  to  vessels.    624-26. 

2.  Write  papers  in  good  literary  form   on  the  railroads  of  the   United   States:    (a) 
mileage,  (b)  rolling  stock,  (c)  traffic,   (d)  rates,   (e)  finances.    Sta.  Abs.,  579-90. 

3.  Early   development   of   railroads.     Government   aid.     B.,    56-65;    Seligman,   520-24; 
F.,  534-6;  Hadley,  1-63;  B.  H.  Meyer,  53-88;  Johnson,  Railway  transportation,  13-33,  307-321. 

4.  Give    some    example    of   competition   between   railroads.     Noyes,    124-36;    Hadley, 
82;  Johnson,  Railway  transportation,  213-27. 

5.  Explain  the  importance  of  classification  in  rate-making.     Seligman,  532-5;  John- 
son, Railway  transportation,  283-92. 

6.  Compare    American    railway    rates    with    European.     Johnson,    Railway    transpor- 
tation, 293-304. 

7.  What   are  pools,   discriminations,    private   cars,   rebates?     Find   examples.     Selig- 
man, 535-40;  Noyes,  89-123,  137;  F.,  530-33;  Seager,  461-7;  Johnson,  Railway  transportation, 
228-43;   Bullock  (3rd  ed.),  346-8,  357-61;  McClures  26:318-31,  398-411. 

8.  Give   some   examples    of  consolidation   of  railroads.     Noyes,   154-60;    Bullock    (3d 
ed.),  348-51. 

9.  The  growth   of  great  railroad   systems.     Seligman,   525;   Johnson,    Railway  trans- 
portation, 52-68;  Bogart,  305-26;  Coman,  322;  Bullock  (3d  ed.),  343-53;  Laughlin,  Industrial 
America,  140-83. 

10.  Give  an  example  of  the  effect-  of   (a)  water  transportation  on  railway  rates,   (b) 
the   building   of   a    new    parallel    railway.     Hadley,    93-5;    Johnson,    Water    transportation, 
374-9;  Bogart,  329-34. 

11.  Describe  some  example  of  government  regulation  of  railroads.    Seligman,  541-44; 
Acworth,  130-59;   Noyes,  200-21;   Bullock    (3d  ed.),  363-70;   F.,  541-4;   Seager,  469-73;   B.    H. 
Meyer,  189-239;  Johnson,  Railway  transportation,  322-34. 

12.  Describe    some    example    of    government    ownership.     Seligman",    562-70;    H.    R. 
Meyer's  books;  Hadley,  186-236;  Johnson,  Railway  transportation,  335-48. 

13.  Describe  the  relation  of  some  street  railway  to  the  government  and  the  public. 
Seligman,    572-3;    Seager,    448-50,    453-4;    Shaw,    Municipal    government    in    Great    Britain, 
127-33. 

14.  Same    for    some   telegraph    or    telephone    system.     Seligman,    519;    Seager,    450-2; 
Cheyney,  273-5;   Bogart,  334-6. 

PROBLEMS. 

1.  What  is  the  fundamental   difference  between  the  railroads  and  the  highways  or 
a  waterway?    Noyes,  1-9;  Acworth,  1-9. 

2.  How  is  the  competition  between  railroads  different  from  that  between  draymen? 
Noyes,  128-33;  Hadley,  73-74. 


Commerce;  the  Process  of  Exchange  23 


3.  Why    is    the    tendency    toward    consolidation    of    railroads    so    irresistible?     Is    it 
ever  of  benefit  to  the  public?    Noyes,  128-60;   F.,  539-40;   Hadley,  63-82;   Bullock   (3d  ed.), 
351-3;   Lectures  on  commerce,  111-28. 

4.  What   should   be  the  basis   for   making  railway   rates?     (a)    Cost  of  service,    (b) 
distance,    (c)    what    the   traffic    will    bear,    (d)    uniform    for    all    distances    and    classes    of 
goods.    Bullock  (3d  ed.),  353-61;  Seligman,  528-35;  Acworth,  51-130;  Noyes,  24-88;   Hadley, 
100-24;  Johnson,   Railway  transportation,  271-92;   Clark,  402-50;   Harris,  142-204. 

5.  Government   ownership   vs.    government  regulation.     Johnson,.  Railway  transpor- 
tation, 420-27;   Bullock   (3d  ed.),  361-72;  Seligman,  541-4,  562-78;   Noyes,  222-60;   H.,  398-400; 
F.,  544-54;  Hadley,  236-60;  Seager,  455-9,  473-5;  B.  H.   Meyer,  29-47;  H.  R.  Meyer's  books. 

6.  Parcels  post  vs.  the  express  companies.    Seligman,  567-8;  Johnson,  Railway  trans- 
portation, 158-69. 


24  Economics 


PART  V.  VALUE :  THE  BASIS  OF  EXCHANGE. 

1.  Definitions. 

a.  Utility,  total  and  marginal;  subjective  value. 

b.  Value  in  exchange.    May  it  be  more  or  less  than  subjective  value? 

c.  Price.  • 

d.  Demand.    Imagine  a  line  of  purchasers  of  indefinite  length  ranged 

in  the  order  of  the  price  they  will  pay. 

e.  Supply.    Imagine  a  line  of  sellers. 

B.,  88-96,  183-8;  W.,  67-70,  74;  A.,  102-9;  M.,  I,  537-8;  L.  M.,  249-52;  R.,  1,  2;  E., 
121-5;  E.  &  W.,  87-99,  165-8;  L.,  63,  108;  G.,  82-4;  Mar.,  8,  9;  Readings,  245-9; 
Seager,  81-91;  F.,  21-9;  Seligman,  172-88,  222-3. 

EXERCISES. 

1.  Connection  between   the  amount  of  corn  produced   and  the  price  of  corn.     Sta. 
Abs.,  543.    Same  for  wheat,  544.    Oats,  545. 

2.  Connection   between    the    price    of    coffee   and    tea   and    the    amounts    consumed. 
Sta  .Abs.,  481,  482. 

3.  The   effect   of   excise   and   customs   duties   on   the   consumption   of  commodities: 
wool,   Sta.   Abs.,  470;    sugar,   683;  liquors,   687;   tea,   482.     The   import   duty   of  about   two 
cents  a  pound  on  sugar  was  removed  April  1,  1891.    The  duty  was  restored  in  August, 
1894,   and  raised   somewhat   in  July,  1897.     The   duties   on   wool   were   raised   in    October, 
1890,  removed  entirely  on  the  imported  grades  in  1894,   and  restored  in  1897.     The  taxes 
on  liquors,  both  customs  and  internal,  were  doubled  in  July,  1898,  and  a  customs   duty 
was  put  on  tea. 

2.  Competition. 

a.  What  is  the  force  that  drives  the  business  world? 

b.  Construct  a  definition  which  represents  competition  as  a  negative 

quality.   What  things  may  make  competition  imperfect? 

c.  Assumed  in  developing  general  principles.    It  is  to  economic  theory 

what  the  vacuum  is  to  the  law  of  falling  bodies. 

d.  A  market.   What  is  a  perfect  market? 

W.,  74-5;  N.,  248-52;  L.,  104-5;  M.,  I,  541-3;  L.  M.,  175-7;  Mar.,  204-9,  217;  H.,  72-4; 
Seager,  98-104;  Seligman,  223,  139-53;  Ely,  Evolution  of  industrial  society, 
123-51. 

EXERCISES. 

1.  Local  variations  in  the  prices  of  commodities  which  are  not  easily  transported: 
hay,  Sta.  Abs.,  557;  potatoes,  558.     Compare  with  these:    flaxseed,  559;  wool,  560-61. 

2.  The  transference  of  an  industry  to  a  locality  possessing  greater  natural   advan- 
tages is  illustrated  by  the  rise  of  cotton  manufacturing  in  the  South.     Sta.  Abs.,  680. 

3.  A  measure  of  the  mobility  of  labor  is  found  in  the  fluctuations  in  the  number 
of  immigrants  into  the  United  States,  and  in  the  number  of  passengers,  other  than  cabin, 


Value ;  the  Basis  of  Exchange  25 


going  abroad.  Sta.  Abs.,  60-2.  Find  what  per  cent  the  immigration  was  of  the  total 
population.  In  what  year  was  it  the  largest?  The  smallest?  Account  for  the  fluctua- 
tions. Same  of  emigration. 

3.  Market  Price — temporary  equilibrium  of  demand  and  supply. 

a.  Effect  of  a  change  in  exchange  value  or  price. 

(1)  Effect  of  a  rise  in  price  on  supply;  on  demand. 

(2)  Effect  of  a  fall  in  price  on  supply;  on  demand. 

b.  Effect  on  price  of  changes  in  supply  and  demand. 

(1)  Effect  of  an  increase  in  supply;  in  demand. 

(2)  Effect  of  a  decrease  in  supply;  in  demand. 

c.  Demand  and  supply  tend  to  equal    each    other.     The    equation  is 

maintained  by  fluctuations  in  price. 

Clow,  117-22;  B.,  189-93;  A.,  106;  Mar.,  210-23;  N.,  215-23;  M.,  I,  549-51;  L.  M.,  256; 
H.,  75-85;  Seligman,  225-38. 

EXERCISES. 

1.  For  two  weeks  follow  the  price  of  some  product  or  the  stock  of  some  corpora- 
tion in  the  market  reports  given  in  the  newspapers.     Prepare  a  chart   (Clow,  132)   show- 
ing the  variations.     Read  any   explanations  that  are  given,  and  as  far  as   possible   show 
how  the  fluctuations  resulted  from  changes  in  demand  or  supply. 

2.  Make  a  chart  showing  the  variations  in  the  average  price  of  some  commodity 
for  a  series  of  years.     Sta.  Abt.,  565-76. 

4.  Normal  Price — stable  equilibrium. 

a.  Conditions  of  supply. 

(1)  Strictly  limited  in  quantity. 

(2)  Capable  of  indefinite  increase  in  production  without  much 
change  of  price. 

(3)  Subject  to  law  of  diminishing  returns. 

b.  Causes  of  variation  from  normal  price. 

(1)  Unforeseen  variation  in  either  demand  or  production,  when 

a  readjustment  of  production  cannot  be  quickly  made. 

(2)  Imperfect  competition. 

B.,  194-207;  L.,  Ill,  117-129;  W.,  78-88;  M.,  I,  547,  556-9;  L.  M.,  259,  261-3,  285;  A., 
107-8;  A.  S.,  53-8;  R.,  75-9;  Mar.,  228-35;  E.,  133-7;  E.  &  W.,  169-73;  N.,  114-23; 
H.,  86-91;  Clark,  92-126;  Seager,  104,160-2;  Seligman,  239-74. 

EXERCISES. 

1.  Try  to   discover  normal   price   in   a  table  of  the   prices   of   some  commodity  for 
a  series  of  years.    Sta.  Abs.,  565-76. 

2.  Do  you  see  indications  of  changes  in  normal  price? 


26  Economics 

5.     Peculiar  Cases  of  Value. 

a.  Joint  products  and  by-products. 

(1)  Value  of  the  group  of  articles  subject  to  joint  production. 

(2)  Value  of  each  article  in  the  group. 

b.  Monopolies. 

(1)  Kinds  of  monopolies. 

(a)  Legal-patents  and  copyrights. 

(b)  Natural — that  which  cannot  be  duplicated. 

(c)  Industrial — growing  out  of  business  conditions. 

(2)  Value  of  monopolized  products. 

(a)  When  there  are  no  expenses. 

(b)  How  affected  by  fixed  charges? 

(c)  How  affected  by  proportional  expenses? 

c.  Prices  under  excessive  competition. 

(1)  Competition  will  be  excessive  when — ' 

(a)  Low  prices  will  not  stop  production:    Fixed  capital, 

immovable,   specialized — local   use.    Suspension   dete- 
riorates plant,  connection. 

(b)  Increase  in  production  is  not  accompanied  by  a  pro- 
portional increase  in  expense. 

(c)  Monopoly  can  give  better  or  cheaper  service. 

(d)  High  profits  can  be   expected   after   competitors   are 
crushed. 

(2)  How  low  will  prices  go? 

(a)  Secret  rates  to  secure  additional  business. 

(b)  What  if  these  rates  are  extended  to  all  the  business? 

(c)  When  will  it  be  profitable  to  go  out  of  business? 

(3)  Industrial  monopoly  must  result. 

Joint  products:    B.,  207-8;   M.,  II,  120-3;  L.  M.,  372-4;  Mar.,  240;  A.,  114-5;  E.   & 

W.,   174-5;    Seligman,    251-3. 
Monopolies:     B.,  301-12;  E.,  58-67,  207;   E.   &  W.,  177-86;   N.,   273-5;   L.,  133,  note; 

Mar.,  247-9;   M.,  I,  552;   Nich.,  II,  59-66;   Clark,  373-95;   F.,  302-44;   Seager,  187- 

203;  Ely,  Monopolies  and  trusts;   Seligman,  152-3,  255-9. 

EXERCISES. 

1.  Give  illustrations  of  joint  products  and  by-products  that  have  come  under  your  ' 
own  observation.    Twelfth  census,  Vol.  10:  725-748. 

2.  Make    up    a    table    which    will    illustrate    the    influence    of    variable    expenses    on 
monopoly  prices.     B,  304. 

3.  Prepare  a  special  report  on  the  formation  of  some  industrial  combination. 

a.  United   States   Steel.     Bridges,    History   of   Carnegie    Steel    Co. 

b.  Amalgamated   Copper. 

c.  International   Harvester. 

d.  American    Tobacco. 

e.  International    Mercantile    Marine, 
f.  Diamond   Match. 

Ripley,   Trusts,   etc.;    Meade,   Trust   finance;   Jenks,   Trust   problem;   find   articles   in 
periodicals   by    Poole's   Index. 


Value;  the  Basis  of  Exchange  27 


4.  Give  examples  of  the  methods  used  by  a  trust  to  crush  out  a  small  competitor. 
Clark,   Control   of  trusts;    Nolan,    Combinations,   etc.;    Cosmopolitan,  38:   666;    Ely,    Prob- 
lems of  to-day;  Laughlin,   Industrial  America,  100-40. 

5.  Prepare  a   special   report  on  the  formation   of  the   Standard   Oil   Co.,   and  show 
how  the   word    trust     came   to   be   applied   to   any   large   industrial   combination.     Coman, 
327;  Bogart,  405-7;  Tarbell,  History  of  the  Standard  Oil  Co.;  Lloyd,  Wealth  against  com- 
monwealth;  Von   Halle,  Trusts. 

PROBLEMS. 

1.    What  should  be  done  with  monopolies? 

a.  Laissez  faire. 

b.  Government   regulation. 

(1)  Monopoly  profit  taken   by  taxation. 

(2)  Regulation  of  charges. 

(3)  Secure  honesty  and  publicity  of  management. 

c.  Government   ownership. 

B.,  312-27;  H.,  164-79,  391-403;  E.,  271-306;  E.  &  W.,  186-92;  Seager,  498-509,  454-6; 
Seligman,  '559-78;  F.,  514-24,  545-54;  Laughlin,  Industrial  America,  100-40;  Shaw, 
Mun.  Govt.  in  Cont.  Europe,  45-54,  346-55,  458-60;  Bemis,  Municipal  monopo- 
lies; Foote,  Municipal  public  service  industries;  Report  of  Chicago  Trust 
Conference;  also  the  references  above. 

2.     It  has  been  said  that  a  monopoly  does  not  eliminate  competition,  but  only  places 
it  on  a  new  basis.    True? 


28  Economics 


PART   VI.     DISTRIBUTION. 

1.  Introduction. 

a.  By  what  name  is  the  total  produce  of  a  country  designated? 

b.  Shared  between   the   three   agents  in   production,   as   rent,   interest, 

wages,  and  profits. 

c.  What  is  the  problem  of  distribution  ? 

B.,  367-70;  W.,  161-7;  A.,  158-64;  N.,  128-9;  Mar.,  257-70;  E.  &  W.,  246-50;  Seligman, 
351-3;  Seager,  155-68;  Clark,  74-91;  Clark,  Distribution  of  Wealth,  1-9. 

EXERCISES. 

NOTE.  For  all  of  the  questions  under  this  topic,  and  for  some  under  the  topics 
which  follow,  the  data  do  not  exist  from  which  exact  or  even  approximate  answers  can  be 
derived.  But  it  is  profitable  to  gather  the  data  which  do  exist,  and  to  find  the  limits 
within  which  the  truth  must  lie. 

1.  What   sum   may  be   taken  to  represent  a   year's   produce   of  the   United   States? 
(a)   Start  from  the  average  of  earnings  and  the  number  of  persons  having  occupations. 
Census,   85,  300;   Sta.   Abs.,   43,   514.     (b)    From  the   annual   production   of   wealth   and   ser- 
vices.   Census,  24,  25,  219,  301;  Sta.  Abs.,  40,  41,  674,  677,  678.    In  connection  with  profes- 
sional and  personal   services  use  average  earnings  again.     In  what  respects  are  these   data 
incomplete? 

2.  How  much  does  the  estimate  amount  to  per  capita?  How  much  for  each  worker? 
Census,  85. 

3.  Apportion   the   estimated   production   among   the   various   classes    of   expenditure 
according  to  Engel's  Law.    Bullock,  99. 

4.  Make  an  attempt  to   distribute  the  total  income   of  the  railroads   into   the  four 
kinds   of   social    income — rent,    interest,    etc.     Sta.    Abs.,  587.     Notice   the   number   of   em- 
ployees.   Sta.  Abt.,  41. 

2.  Rent. 

a.  What  fixes  the  price  of  produce  subject  to  the  law  of  diminishing 

returns  ?    The  margin  of  cultivation. 

b.  The  differential  productiveness  of  lands  above  the  margin. 

c.  Relation  of  rent  to  the  price  of  produce  and  the  price  of  land. 

d.  Special  varieties  of  rent. 

(1)  Non-competitive  rent. 

(2)  Rent  of  mines. 

(3)  -Situation  rent  in  cities. 

e.  The  unearned  increment. 

B.,  31-402;  W.,  168-89;  A.,  165-8;  N.,  241-6;  M.,  I,  520-1,  525,  577-86;  L.  M.,  233-40, 
277-83;  L.,  244-56;  E.,  168-78;  E.  &  W.,  252-65;  R.,  51-5,  59,  71-4;  H.,  287-93; 
Nich.,  I,  402-16;  Seager,  209-20;  Seligman,  371-90;  F.,  53-98;  Clark,  159-94;  Dist. 
of  Wealth,  354-72;  Readings,,  568-88. 


Distribution  29 


EXERCISES. 

1.  If  possible  find  by  inquiry  an  example  of  land  which  is  leased  without  improve- 
ments for  a  long  term  of  years,  the  lessee  putting  on   such  capital  or  making  such  im- 
provements as  he  desires.    Find  the  amount  of  the  rent  and  the  value  of  the  land.    The 
rent  is  what  per  cent  of  the  value?    McClures,  24:  563-78. 

2.  It  may  be  possible  to  get  a   similar  result  from  a  piece  of  land  which  has  re- 
cently  been   improved.     Note   the  value   of  the   land   before   the   improvment   was   made, 
and  then  the  cost  of  the  improvement.    Find  the  annual  income  of  the.  property,  and  de- 
duct from  it  all  expenses,  taxes,  insurance,  repairs,  depreciation,  management,  etc.    Allow 
the  land  its  proportion  of  the  net  income,  and   see  what  proportion  this  makes  on  the 
value  of  the  land. 

3.  From   assessors'   valuations   find  the   proportion   between  the  value   of  land   and 
the   value   of  the  improvements    on   it.     Distinguish    (a)    residential   property,    (b)    farms, 
(c)    stores,  office  buildings,   factories,  and   other  business  property. 

4.  What  is  the  total  value  of  the  land  in  the  United   States,   not  counting  build- 
ings?   Sta.  Abs.,  542,  note;  Census,  217,  note.    See  the  large  Census  volume  on  "Wealth, 
Debt,  and  Taxation,"  pages  3-21. 

5.  What  proportion  of  the  land  included  in  farms  is  improved  so  as  to  yield  a  rent? 
Census,  288;  Sta.  Abs.,  537.    What  proportion  of  all  land  is  included  in  farms  or  in  cities? 
Sta.  Abs.,  17.    What  proportion  of  the  land  in  cities  is  improved?  Get  answers  from  actual 
observation.    What  proportion  of  the  land  of  a  state  is  improved  so  as  to  yield  a  rent? 
How  nearly  is  the  land  rent  of  a  state  or  city  in  proportion  to  its  land  valuation? 

6.  Make  an  analysis  of  the  tenure  of  homes.    Census,  28-31,  90-94. 

7.  Make  an  analysis  of  the  tenure  of  farms.    Census,  218,  227,  294,  295. 

PROBLEMS. 

1.  A  mine  yields  100,000  tons  of  coal  a  year,  and  will  be  good  for  ten  years.    The 
cost   of  mining  and   getting   the   coal   to    market   is   ten   cents   per   ton   less   than   at   the 
poorest  mine  it  pays  to  work  for  the  same  market.    What  should  the  annual  rental  be? 

2.  Is    it    practicable    and    desirable   to    take   rent    out   of  the   sources    of   individual 
income  and  devote  it  to  the  uses  of  the  state?    B.,  450-6;   W.,  333-7;   M.,   I,  291-3,  295-8; 
L.  M.,  172-4;  Nich.,  I,  2-56-71;  G.,  441-64,  529-32;  E.  &  W.,  340-2;  F.,  374;  Seligman,  388-91, 
Essays  in  taxation,  64-94;    Seager,  517-27;   Cox,   Land  nationalization. 

3.     Interest. 

a.  Rate  of  interest  is  the  point  of  equilibrium  between  the  supply  of 

and  the  demand  for  loanable  capital. 

(1)  What  does  this  capital  consist  of?    What  would  it  consist 

of  if  there  were  no  money? 

(2)  Conditions  affecting  supply. 

(3)  Conditions   affecting  demand. 

Suppose  four  permanent  improvements  costing  $1,000  each  could  be  made  on 
a  farm  so  as  to  increase  the  annual  product  by  $100,  $80,  $60,  and  $40  re- 
spectively. Which  ones  could  the  owner  afford  to  make  if  interest  is  at  9 
per  cent?  7  per  cent?  6  per  cent?  5  per  cent? 

b.  Risk  and  rate  of  interest. 

c.  How  does  the  quantity  of  money  in  circulation  affect  the  rate  of 

interest? 


30  Economics 


d.    Relation    of   the    rate   of    interest    to    the    present    value    of   fixed 

incomes.    Bond  value  tables. 

What   is   the  present  worth   of  a  perpetual    annuity   of  $100   when  the   market 
rate  of  interest  is  5  per  cent?    When  interest  is  10  per  cent? 

B.,  379-91;  Clow,  126-30,  213-17;  W.,  190-200;  N.,  302-11;  E.,  209-17;  E.  &  W.,  290-99; 
A.,  171-5;  A.  S.,  86-96,  172-9;  L.,  183-90;  L.  M.,  440-9;  M.,  II.,  204-14;  Mar., 
292-6;  Nich.,  II.,  215-34;  H.,  270-84;  Seager,  244-58;  Seligman,  392-410;  F.,  98- 
159;  Clark,  127-30,  146-58,  213-7,  339-57;  Dist.  of  Wealth,  116-38. 

EXERCISES. 

1.  Compare  rates  of  interest  on  public  debt  in  the  principal  countries  of  the  world. 
Sta.  Abs.,  694. 

2.  Trace  the  fluctuations  in  the  earnings  of  banks.    Sta.  Abs.,  126. 

3.  From  data  in  the  newspapers  or  financial  publications,  compute  the  rate  of  inter- 
est yielded  to  an  investor  by  various  securities  bought  at  the  present  market  price. 

4.  From  one  of  the  books  issued  by  dealers  in   securities  pjepare  a  chart  showing 
the  highest  and  lowest  prices  of  some  bond  each  year  for  a  series  of  years. 

5.  Same  for  the  rate  of  interest  on  time  loans.    On  call  loans. 

6.  Study  the  variations  in  the  rate  of  interest  on  mortgage  loans  between  different 
times  and  places. 

7.  Write    a    brief  'history    of   the    interest-bearing    debt    of    the    United    States.      Sta. 
Abs.,  89. 

8.  Make  an  analysis  of  the  local  indebtedness  of  the  United  States.    Sta.  Abs.,  86-88. 

9.  Give  a  special  report  on  historical  changes  in  the  rate  of  interest.    Readings,  563-8. 

PROBLEMS. 

1.  What  should  be  the  present  worth  of  the  coal  mine  in  Problem  1  above? 

2.  Should  the  rate  of  interest  be  limited  by  law?    W.,  307-13;   Seligman,  409-10. 

3.  Should  notes   and  mortgages  be   exempt  from   taxation?     Ely,   Taxation  in  Am. 
states  and  cities,  335-9;  Wells,  Theory  and  practice  of  taxation,  472-84. 

4.  How   shall   I   invest   my   savings?      Lectures     on     commerce,     254-77;     Hamilton, 
Savings  and  savings  institutions. 

4.     Wages. 

a.  Real  wages  vs.  money  wages. 

b.  A  purely  competitive  rate  of  wages  would  be  the  point  of  equilibrium 

between  the  dema«nd  for  and  the  supply  of  labor. 

(1)  Conditions  affecting  demand. 

(a)     Natural  resources. 

(fe)     Amount  of  capital. 

(c)     Temporary  state  of  credit  and  condition  of  business. 

(2)  Conditions  affecting  supply.    For  each  kind  of  work  there 

is  a  practical  minimum  rate  of  wages;  below,  the  supply 
of  laborers  will  not  be  maintained;  above,  it  will  tend  to 
increase  indefinitely. 

(a)  For  men,  women,  children,  amateurs. 

(b)  For  different  kinds  of  work.    Necessaries  of  life  vs. 

maintenance  suitable  for  the  work. 

(c)  Standard  of  living. 


Distribution  31 

c.  Laborers  of  all  kinds  who  have  superior  productive  power  receive 

a  rent  of  ability. 

d.  Wages  in  different  occupations. 

(1)  Differences  due  to  relative  attractiveness  of  occupations. 

(2)  What  factors  limit  competition,  for  occupations? 

(3)  Why  does  some  attractive  work  receive  very  high  pay  and 

some  disagreeable  work  very  low  pay? 

B.,  402-16;  L.,  193-201;  A.,  178-86;  E.,  180-5;  E.  &  W.,  267-87;  W.,  216-31;  N.,  252-6; 
H.,  301-35;  Mar.,  264-89;  R.,  80-4;  A.  S.,  34,  66-8,  70-2,  100-4;  G.,  492-506;  Nich., 
I.,  326-64;  L.  M.,  175-92,  205-15;  M.,  I.,  471-94;  Taussig,  Wages  and  Capital; 
Seager,  222-43;  Seligman,  411-28;  F.,  184-215;  Clark,  127-45,  282-300,  315-38;  Dist. 
of  Wealth,  77-115;  Readings,  543-63;  Smart,  Studies  in  economics,  1-60. 

EXERCISES. 

1.  What    proportion   of   the   value    of   all   the    manufactured    products   in   the   United 
States  is  paid  to  wage-earners?    What  proportion   is   paid  in   salaries?     Census,  300,   301. 
Distinction  made  by  the  Census  between  wages  and  salaries.    Find  a  few  industries  which 
vary  widely  in  the  proportion  going  to  wages.     Census,  302-21. 

2.  Divide  the  sums  paid  for  salaries  and  wages  by  the  numbers  of  persons  earning 
salaries  and  wages  respectively.    Census,  300.    What  is  the  source  of  error  in  considering 
these  quotients  the  averages  of  salaries  and  wages? 

3.  How  much  do  wages  differ  in  different  (a)  localities,   (b)  occupations,  (c)  periods 
of  time?    Large  volume  of  the  Census  on  "Employees  and  wages";  Bulletins  of  the  De- 
partment or  Bureau  or  Labor;  Readings,  533-43.     (d)  Sta.  Abs.   (1907),  210,  211,  shows  the 
fluctuations  in  real  wages  as  well  as  in  money  wages. 

4.  Compare    men,    women,    and    children    as    to    (a)    the    number    employed,    (b)    the 
amount  and  proportion  of  wages,  and  (c)  the  increase  in  wages  from  1890  to  1900.    Cen- 
sus,  300.     (d)    By   using  the   large   volume,    "Employees   and   wages,"  these   comparisons 
may  be  extended  to  different  states  or  cities,  and  to  different  occupations.    See  also  Sta. 
Abs.   (1907),  173-87. 

5.  From  Table  4  in  the  large  Census  volume  on  "Occupations,"  pp.  16-19,  study  the 
age  at  which  various   occupations  are  begun,  the  age  at  which  the  number  who  follow 
each  is  at  the  maximum,  and  the  age  at  which  the  greatest  number  retire  from  it. 

6.  Prepare  a  special  report  on  the  history  of  labor  organizations  (a)  in  England;  (b) 
in  the  United  States.    B.,  432-41;   E.,  187-97;   Cheyney,  277-94;  Webb,  Howell. 

7.  Give  an  account  of  some  labor  organization  derived  from   (a)   interviews  with  its 
officers,   (b)  its  by-laws  and  other  official  literature,   (c)   other  sources.    Readings,  613-40. 

8.  Give  an  account  of  (a)  a  strike,   (b)  the  settlement  of  some  labor  dispute  by  arbi- 
tration,   (c)    some   working   agreement   between    employer  and   employees,     (d)    Write   up 
strikes  and  lockouts  from  the  statistics.    Sta.  Abs  (1907),  188-208. 

9.  Give  a   special   report   on   the   policies   of  labor   organizations.     Readings,   589-612; 
Seager,   385-441;    Seligman,   434-42;    Laughlin,   Industrial  America,   67-99;    Commons,   Trade 
unions;  Hollander  &  Barnet,  Trade  unionism. 

10.  Prepare  a  special  report  on  what  has  been  done  by  legislation  or  other  government 
action  to  bring  about  the  arbitration  of  industrial   disputes.     Bulletins  of  the  Bureau  of 
Labor;  Seager,  412-33. 

11.  Prepare  a  special  report  on  the  hours  of  labor.    Readings,  640-67. 

12.  Write  up  in   good  literary  form  what  you  see  of  interest  in  one  of  these  tables: 
Nos.  155,  156,  157   (Census,   322-5);  164   (331-3);   167   (338-9);   171,   172   (350);   173   (351);   174 
(352-60);  175  (361-81). 


32  Economics 


PROBLEMS. 

1.  Could  a   surgeon  maintain  his  skill   and  keep   up  with  the  progress  of  his  pro- 
fession on  an  income  of  from  $2  to  $5  a  day? 

2.  What  determines   the  income   of  the   canvasser?     The  travelling   salesman? 

3.  Account  for  the  low  wages  of  shop  girls,  the  small  income  of  country  editors, 
the  difference  between  the  wages  of  men  teachers  and  the  wages  of  women  teachers,  the 
large  sums  paid  to  great  musicians,  the  large  incomes  of  some  doctors  and  lawyers,  the 
small  remuneration  received  by  the  writers   of  great  poems  and   scientific  works. 

4.  In  what  ways  is  labor  different  from  a  commodity?    B.,  424-31;  E.,  287-92. 

5.  The  relations  of  employer  and  laborer. 

a.  Recognition   of   labor  organization.     Union   shop  vs.   open   shop. 

b.  How   can   the   public   be   protected   against   the   inconvenience,   loss,   and   danger 
resulting  from  strikes?    W.,  324-30;   L.,  344-9;   Ely,  Evolution  of  industrial   society,  331-97. 

c.  Arbitration:   voluntary   or   compulsory;    by   a   standing   board   or   one   chosen   for 
the  occasion.     B.,  446-9;   Lloyd,   Newest  England. 

d.  Conciliation,    collective    bargaining,    trade    agreements.     How    can    an    agreement 
be  enforced  against  an  unwilling  party? 

Ashley,  Adjustment  of  wages;  Peters,  Labor  and  capital;  Seligman,  445-7;  Civic 
Federation,  Industrial  conciliation;  Howell,  Labour  legislation;  Ely,  Labor  movement; 
Lynch,  Redress  by  arbitration;  Price,  Industrial  peace;  Oilman,  Methods  of  industrial 
peace;  Wright,  Industrial  arbitration  and  conciliation;  Schulze-Gaevernitz,  Social  peace. 

6.  \Vomen    and    child    labor.     Adams    &    Sumner,    Labor    problems;    19-67;    Smart, 
Studies  in  economics,  105-37. 


5.     Profits. 

a.  Various  definitions  and  meanings. 

b.  Deductions  necessary  in  order  to  determine  profit. 

(1)  Explain  wages  of  superintendence,  depreciation,  insurance. 

(2)  Pure  profit  vs.  monopoly  gains  and  conjunctural  gains. 

c.  The  relation  of  profit  to  the  marginal   manager  and  the  price  of 

produce. 

B.,  416-23;  Clow,  122-5;  L.,  222-35;  E.  &  W.,  302-10;  F.,  282-91;  W.,  201-15;  Clark, 
128-33;  Dist.  of  Wealth,  201-5,  290-1,  405,  410-12;  Seager,  169-87;  Seligman, 
353-70;  Readings,  543-63;  Nich.,  I.,  388-401;  Mill,  I.,  495-508. 

EXERCISES. 

1.  From    the    value    of   the   products    of   all    manufactures,    deduct    cost    of   materials, 
miscellaneous   expenses,   wages,   salaries,   and   interest   on  the  capital.     The  remainder   is 
what  per  cent  of  the  capital?    Census,  300.     Note  2  tells  why  this  remainder  for  1890  is 
different  from  that  of  1900. 

2.  Select   industries   which   show   how    widely   this   remainder   varies.     Census,   302-21. 
Try  to  account  for  the  variations. 

3.  Compute  in  the  same  way  the  profits  of  the  great  combinations.    Census,  328,  329. 
Compare  with  other  industries.     Census,   302-21. 


Distribution  33 

6.     Summary  of  Distribution. 

a.  Logical  division  of  the  factors  of  production. 

(1)  The  universal  or  non-privileged:    (a)   capital  or   (b)   labor 

in  positions  subject  to  perfect  competition  by  new  capital 
and  labor. 

(2)  The   differential    or    privileged:    (a)    capital    or    (b)    labor 

when   enjoying  partial   or   complete   monopoly,   and    (c) 
natural  resources. 

b.  The  share  of  product  going  to  the  differential  factors. 

(1)  Obeys  the  laws  of  rent. 

(2)  What  is  the  "no-rent"  labor  and  capital? 

(3)  Effect  of  inventions,   social   progress,   etc.     When   do  they 

contract  and  when  do  they  extend  the  margin  ? 

c.  The  share  of  the  product  going  tp  the  universal  factors. 

(1)  Determined  by  the  productiveness   of  the  marginal   incre- 

ment. , 

(2)  The  law  of  substitution. 

(3)  Effects  of  progress. 

Mar.,  258-63,  330-70;   M.,  II.,  259-340;  L.   M.,  465-517;   Seager,  275-282,  299-301;.  Clark, 
195-242;   Dist.    of  Wealth,  173-205,   273-98. 

PROBLEMS. 

Each    of   the   following   plans   has   been   urged   as   a   remedy   for   our   industrial    ills, 
especially  those  connected  with   the  distribution  of  wealth : 

1.  Co-operation:    by    producers;    by    consumers.     Adams    &    Sumner,    Labor    prob- 
lems, 379-432;   F.,  295-301;   Seager,  513-7;   B.,  443-5;  W.,  319-24;   Potter,   Co-operative  move- 
ment in   Great   Britain;   L.,  350-58:    E.,  200-3;   Seligman,  513-17;    Cheyney,  295-307;    M.,    II, 
371-7. 

2.  Profit   sharing:     F.,   292-5;    Clark,   451-516;    A.    &    S.,   333-78,   555-8;    Seager,   511-13; 
B.,    442-3;    M.,    II,    353-7;    Gilman,    Profit    sharing,    Dividend   to    labor;    Seligman,    510-12; 
Cheyney,  307-10. 

3.  Socialism:     E.  &  W.,  312-25;   B.,  456-68;  A.,  23-4,  62-3;   N.,  512-25;   E.,  308-14;   M., 
I,   261-77;    II,    378-81;    L.    M.,    157-71;    Nich.,    I,    424-34;    G.,    410-29,    439-41;    Fabian    Essays; 
Ely,   Rae,   Brooks;   Seager,   528-35;   Seligman,   559-62;    Readings,   668-793;    Hunter,   Socialists 
at  work. 


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